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New TDS Framework for Purchase of Property from NRIs

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New TDS Framework for Purchase of Property from NRIs Effective 1 October 2026

Income Tax Notification:

The CBDT has notified the Income-tax (Fifth Amendment) Rules, 2026, introducing a specific TDS compliance framework under Section 393(2) for cases where a resident Individual or HUF purchases immovable property from a non-resident seller. The amendment becomes effective from 1 October 2026.

What has changed?

Earlier, resident buyers purchasing property from a non-resident seller were required to obtain a TAN and follow the regular TDS procedures applicable to payments made to non-residents. The new rules now create a separate compliance mechanism u/s 393(2) specifically for such transactions.

Key Highlights of the New TDS Framework For NRI Purchases

No TAN Requirement for Eligible Buyers
Resident Individuals and Hindu Undivided Families purchasing immovable property from a non-resident can comply with TDS provisions using their existing PAN, eliminating the need to obtain a separate TAN for such transactions.
Dedicated Reporting Through Form 141 (Schedule E)
A new Schedule E has been introduced in Form No. 141 (Challan-cum-Statement) specifically for reporting TDS on property purchases from non-resident sellers. This creates a streamlined and transaction-specific reporting mechanism.
Mandatory TDS Certificate
After depositing the tax, the buyer is required to issue Form No. 132 as the TDS certificate to the non-resident seller.
No Change in TDS Rates
The notification introduces procedural simplification only. The applicable TDS rates, including rates based on long-term or short-term capital gains along with surcharge and cess, remain unchanged.
Dedicated TDS Provision : New Section 393(2) specifically covers consideration paid by a resident Individual or HUF for transfer of immovable property by a non-resident.
Separate Compliance for Joint Buyers
Where a property is purchased jointly, each buyer is required to file a separate Form No. 141 and comply independently as a deductor.
30-Day Compliance Timeline
The TDS must be deposited and Form No. 141 filed within 30 days from the end of the month in which tax is deducted. Form 141 Expanded : Form No. 141 (Challan-cum-Statement) has been amended to include transactions covered u/s 393(2).
Enhanced Non-Resident Seller Reporting
Schedule E requires detailed disclosures relating to the non-resident seller, including foreign address, contact details, Tax Residency Certificate (TRC), Tax Identification Number (TIN), seller-wise consideration, and instalment-wise TDS computation.
Applicability from 1 October 2026
The new framework applies to transactions covered under Section 393(2) with effect from 1 October 2026.
Regular TAN-Based Process Continues for Others
Companies, LLPs, partnership firms, trusts, and non-resident buyers acquiring property from an NRI seller must continue to follow the regular TAN-based TDS compliance and quarterly statement filing provisions.
Objective of the Amendment
The new framework simplifies compliance for resident Individuals and HUFs while ensuring comprehensive reporting of cross-border property transactions and facilitating accurate TDS collection.

Information required in Schedule E

New Schedule E Introduced : A separate Schedule E has been inserted in Form No. 141 exclusively for NRI property transactions. The buyer will need to report:

Property address and type of property
Details of all buyers
Details of all non-resident sellers
PAN of seller (if available)
Foreign address of the seller
Contact number and email ID
Tax Residency Certificate (TRC) Number
Tax Identification Number (TIN) or equivalent foreign tax identification number
Sale consideration and stamp duty value
Agreement and registration dates
Instalment-wise payment details
Capital gain nature (Long-Term/Short-Term)
Applicable TDS rate
TDS amount deducted and deposited
Certificate details issued under section 395, where applicable

Relief where PAN is not available

The notification specifically provides that where the non-resident seller does not possess PAN, reporting of the TRC and TIN (or equivalent identification number) in Schedule E will help ensure that tax is not deducted at a higher rate merely because PAN is unavailable

The amendments are applicable from 1 October 2026. Transactions up to 30 September 2026 will continue to be governed by the existing procedure.

Practical Impact – TDS for Purchase of Property from NRIs

This notification simplifies compliance for resident Individuals and HUFs purchasing property from NRIs by providing a dedicated reporting framework, standardized disclosure requirements, and a specific TDS reporting form instead of relying solely on the broader non-resident TDS procedures. The focus is on capturing foreign tax residency details, ensuring appropriate treaty benefits, and facilitating accurate TDS computation and reporting.

Source: containing CBDT Notification G.S.R. 830(E) dated 22 September 2026

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