TDS on Purchase of Property from a NRI: PAN-Based Compliance

TDS on Purchase of Immovable Property from a Non-Resident: PAN-Based Compliance from 1 October 2026

Income-tax (Fifth Amendment) Rules, 2026 — Notification G.S.R. 830(E) dated 22 September 2026

1. The notification at a glance

The Central Board of Direct Taxes (CBDT) has issued Notification No. 121/2026 (G.S.R. 830(E)), dated 22 September 2026, amending the Income-tax Rules, 2026. The amendment is made u/s 533 read with sections 395(4)(a) and 397(3)(a) and (b) of the Income-tax Act, 2025, and comes into force on 1 October 2026.

2. Background: why this change was needed

3. Amendments made by the notification, provision by provision

(a) Rule 215(1), Table, Serial No. 3.

(b) Rule 218(3). Three changes are made:

• In the opening portion, “and (2)” is inserted after “section 393(1)”. This means the rule now covers sums deducted u/s both sub-sections.
• In clause (d), the word “or” is added.
• A new clause (e) is inserted. It covers consideration for transfer of immovable property (being a sum u/s 393(2) [Table: Sl. No. 17]) paid or credited by a resident individual or Hindu Undivided Family .

The deposit mechanism that applies to the existing PAN-based categories therefore now extends to this case.

(c) Rule 219. In sub-rule (5), the list is extended:

• The “and” in clause (c) is omitted.
• Clause (d) is re-punctuated.
• A new clause (e) is inserted for section 393(2) [Table: Sl. No. 17], where a resident individual or Hindu Undivided Family deducts tax on transfer of immovable property.

In sub-rule (8), the cross-reference “sub-section (1)” is corrected to “sub-section (7)”.

(d) Form No. 132 (Appendix III). The following changes are made:

• The reference line is corrected to “[See rule 215(1)[Table: Sl. No. 3]]”.
• In Part A, against serial number 7, a new option is added after “Transfer of virtual digital asset”: “Transfer of immovable property by a non-resident to a resident individual or Hindu undivided family.”
• Against serial number 10, “(refer Note 3)” is inserted.
• In Part B, the sub-heading reference is changed from “132” to “141”.
• Notes 3 and 4 are replaced by three new notes:
  • Note 3: the field referred to is mandatory if the deductee is a resident.
  • Note 4: some information will be pre-filled to the extent possible.
  • Note 5: amounts are to be filled in ₹ unless otherwise provided.

(e) Form No. 141 (challan-cum-statement). This is the most significant change.

• The heading now covers deductions u/s 393(1) [Table Sl. Nos. 2(i), 3(i), 6(ii) and 8(vi)] and section 393(2) [Table Sl. No. 17].
• In Part A, against serial number 6, a new transaction type is added: “Transfer of any immovable property by a non-resident to a resident individual or Hindu undivided family.”
• In Part B, a new Schedule E is inserted after Schedule D (explained in detail below).
• In Note 3, clause (c), after “Assessing Officer”, the words “or u/s 395(6) issued by the prescribed income-tax authority, as the case may be” are added. Lower/nil deduction certificates issued by the prescribed authority u/s 395(6) are therefore also recognised for determining the rate.
• Notes 6, 7 and 8 are replaced by new Notes 6 to 13.

4. Schedule E of Form 141: what the buyer must report

Schedule E is titled “TDS on any consideration on transfer of any immovable property covered u/s 393(2) [Table: Sl. No. 17]”. It captures the following details.

Property details (Item 1). The buyer reports:

• The address of the property transferred or to be transferred.
• The type of property: land other than agricultural land, a building or part of a building, or both.
• Details of all buyers (PAN, name and each buyer’s percentage share of the total consideration, totalling 100%).

Seller (deductee) details (Item 1(iv)). For each non-resident seller, the Schedule captures:

• PAN, if available.
• Name.
• Status code.
• Contact number and email ID.
• Address in the country or specified territory outside India of which the seller is a resident.
• Tax Residency Certificate (TRC) number.
• Tax Identification Number (TIN).
• The seller’s share of total sale consideration, totalling 100%.

Transaction values (Items 2 to 5). The buyer reports:

• Date of agreement.
• Date of registration, if available.
• Total stamp duty value of the property.
• Total sale consideration.

Mode of payment (Item 6). The buyer states whether payment is lump sum or in instalments. For instalments, the buyer indicates whether it is the first, a subsequent or the last instalment. For subsequent and last instalments, the previous acknowledgement number must be quoted. For the last instalment, the buyer also gives the total consideration paid/credited, including the present instalment. This allows the Department to link all instalments of one transaction.

Transaction details (Item 7, per seller). For each seller, the buyer reports:

• PAN and name.
• Whether the seller is opting out of the taxation regime u/s 202(1) for the relevant tax year. This matters because the default regime affects the rate at which short-term gains are taxed.
• The type of capital gain: long-term capital gains u/s 197(1), or short-term capital gains other than those referred to in section 196.
• Proportionate stamp duty value.
• Amount paid in previous instalments.
• Amount paid/credited in the present transaction and date of payment.
• Amount on which tax is deductible.
• Rate of TDS.
• Certificate number u/s 395(1) (obtained by the deductee) or section 395(2) (obtained by the deductor), if any.
• Amount of TDS and date of deduction.
• Unique acknowledgement number of the corresponding Form No. 145, if applicable.

Rows are repeated for each seller.

Key notes to Schedule E:

• Note 6(a). The non-resident’s foreign contact number, email ID and foreign address are mandatory, whether or not the non-resident has a PAN.
• Note-6(b). Where the non-resident has no PAN, the TRC number and TIN columns must be furnished as per rule 217, so that tax is not deducted at the higher rate applicable for non-furnishing of PAN.
• Note 7. Status codes for the seller:

• Note 8. A TRC is the certificate of residence issued by the government of the foreign country or territory, where its law provides for one.
• Note-9. TIN means the seller’s tax identification number in the country of residence. If none exists, any unique number by which that government identifies the seller.
• Note 10. The TDS amount must include surcharge (if applicable) and cess.
• Note-11. Where there is more than one deductor (for example, joint buyers), each deductor must file a separate form.
• Notes 12 and 13. Some information will be pre-filled, and amounts are in ₹ unless otherwise provided.

5. What remains unchanged

The change is procedural, not substantive. The buyer’s obligation to deduct tax continues, and so does the non-resident seller’s liability to capital gains tax and to file a return. Unlike resident sellers, where TDS is applicable only if the sale consideration exceeds Rs 50 lakh, there is no minimum threshold for deducting TDS when the seller is an NRI. The rate is not a flat 1%. It depends on the nature of the gain (long-term or short-term), as the Schedule’s own fields reflect, plus surcharge and cess.

A lower or nil deduction certificate remains available. It can be obtained by the seller u/s 395(1), by the buyer u/s 395(2), or issued u/s 395(6) by the prescribed authority, and it is to be quoted in the form.

6. Who is covered, and who is not

The relief applies only where the buyer is a resident individual or Hindu Undivided Family and the seller is a non-resident. This relief is only for individual and Hindu Undivided Family buyers. Company and firm buyers will still need a TAN even after October 1, 2026.

7. Transition: transactions around 1 October 2026

8. Practical checklist for buyers and their advisers

Before payment, the buyer should collect the following from the non-resident seller:

• PAN, or where PAN is not available, the TRC and TIN.
• Foreign address, phone number and email.
• The seller’s status.
• The date of acquisition and cost of the property, to establish whether the gain is long-term or short-term.
• Whether the seller has opted out of the default regime.
• Any lower/nil deduction certificate.

The buyer should then:

1. Work out the amount on which tax is deductible and the applicable rate, including surcharge and cess.
2. Deduct at the time of payment or credit, whichever is earlier.
3. Deposit through Form 141 with Schedule E under the buyer’s own PAN.
4. For joint buyers, ensure each buyer files a separate form for their share.
5. Preserve the acknowledgement for later instalments.
6. Retain the challan and TDS certificate, since many sub-registrar offices seek proof of payment during the property registration process

The buyer should also coordinate the linked Form No. 145 filing where applicable.

9. Conclusion

For assistance with TDS computation, lower deduction certificates and Form 141 compliance on property transactions with non-residents, contact Rajput Jain & Associates, Chartered Accountants, P-6/90 (2F), Connaught Circus, Connaught Place, New Delhi-110001 | +011-43-52-0194 | +91-98-11-322-785 | info@carajput.com | www.carajput.com