Major NRI Property TDS Change: Form 141 for NRI Property Purchase, No TAN & PAN-Based Filing from 1 October 2026
Updated: 25 September 2026
A major procedural change is coming for anyone buying property in India from an NRI seller.
CBDT has issued Notification No. 121/2026 dated 22 September 2026, notifying the Income-tax (Fifth Amendment) Rules, 2026. The amendment comes into force from 1 October 2026 and introduces a PAN-based challan-cum-statement mechanism for specified resident individual/HUF buyers purchasing immovable property from a non-resident. Etds
The practical change is significant:
From 1 October 2026, an eligible resident individual or HUF buying immovable property from an NRI will no longer need to obtain TAN merely for this property transaction. The TDS will instead be reported through the expanded Form 141 using a PAN-based mechanism.
However, this does not mean that TDS on NRI property purchases has been abolished.
TAN is being removed. TDS continues.
For the earlier position and transition up to 30 September 2026, also read our detailed update on TDS on Purchase of Property from NRI – TAN Required Till 30 September 2026.
What Has CBDT Changed Through Notification No. 121/2026?
Notification No. 121/2026 has amended the Income-tax Rules, 2026, including Rules 215, 218 and 219, and modifies Forms 132 and 141.
The amendment specifically brings within the Form 141 framework tax deducted under Section 393(2), Table Serial No. 17, where a resident individual or HUF pays consideration for transfer of immovable property by a non-resident. The changes take effect from 1 October 2026. Etds
The significance is best understood through this comparison:
| Particular | Up to 30 September 2026 | From 1 October 2026 |
| Seller | Non-resident | Non-resident |
| Eligible buyer | Resident individual/HUF | Resident individual/HUF |
| TDS obligation | Continues | Continues |
| TAN for specified buyer | Generally required | Not required |
| Identification | TAN-based compliance | PAN-based compliance |
| Reporting mechanism | Existing non-resident TDS framework | Form 141 – new Schedule E |
| Lower TDS certificate | Available | Continues under Section 395 |
| Form 145 | Depending on applicability | Schedule E expressly captures acknowledgement where applicable |
CBDT had earlier announced this simplification in the Budget 2026 FAQs. Notification 121/2026 now prescribes the supporting rule and form changes necessary to implement it. Etds
Form 141 Gets a New Schedule E for NRI Property Transactions
This is perhaps the most important part of the notification.
Until now, Form 141 was designed around four PAN-based transaction categories involving resident deductees.
The existing Income Tax Department user manual presently lists:
Schedule A – Rent
Schedule B – Transfer of immovable property involving resident seller
Schedule C – Contractor/professional payments
Schedule D – Virtual Digital Assets
The existing portal guidance also currently states that Form 141 applies only to resident deductees. Income Tax Department
But Notification No. 121/2026 now inserts an entirely new:
Schedule E – TDS on Transfer of Immovable Property by a Non-Resident
This Schedule is specifically designed for a resident individual/HUF buying immovable property from a non-resident seller under Section 393(2). Etds
Important transition point
As of 25 September 2026, the existing online Form 141 user manual still describes the pre-1 October framework and says Form 141 cannot be used for a non-resident deductee. Income Tax Department
That is not inconsistent with Notification 121/2026 because the new notification becomes effective only from:
1 October 2026
Taxpayers should therefore expect the portal/user guidance to be aligned with the notified Schedule E when the new mechanism becomes operational.
For transactions before 1 October, the existing procedure should not be prematurely replaced with the new Form 141 mechanism.
What Information Will Form 141 Schedule E Capture?
CBDT has designed the new Schedule E as substantially more detailed than a simple challan.
It will capture information about the property, buyers, NRI sellers, capital-gain character, TDS rate, lower-deduction certificates and related Form 145 compliance. Etds
Among the important fields are:
| Information required | Why it matters |
| Property address and property type | Identifies the asset being transferred |
| PAN/details of all buyers | Allocates buyer-wise responsibility |
| NRI seller details | Identifies each non-resident deductee |
| Overseas address/contact details | Establishes foreign-residence information |
| Tax Residency Certificate | Relevant to non-resident documentation |
| Foreign TIN | Additional overseas identification |
| Agreement/registration date | Establishes transaction timeline |
| Stamp-duty value | Relevant for transaction reporting |
| Total sale consideration | Records gross transaction value |
| Lump-sum/instalment details | Important for timing of deduction |
| Nature of capital gain | Long-term/short-term classification |
| Amount liable to TDS | Identifies withholding base |
| TDS rate | Records actual deduction |
| Section 395(1) certificate | Lower/nil TDS certificate obtained by seller |
| Section 395(2) certificate | Determination certificate obtained by buyer |
| Form 145 acknowledgement | Required where Form 145 is applicable |
The inclusion of these fields shows that the new system is not simply a replacement for TAN.
CBDT is creating a transaction-level digital reporting trail for NRI property purchases.
Major New Link Between Form 141 and Form 145
One particularly important field in new Schedule E deserves attention.
CBDT has included:
Acknowledgement number of the corresponding Form 145, if applicable.
This expressly connects the NRI property TDS process with the Form 145 reporting framework wherever Form 145 is applicable. Etds
This is significant because Form 145 is the successor to the earlier Form 15CA framework for prescribed information relating to payments to non-residents.
Therefore, practitioners should no longer look at property TDS and Form 145/Form 146 as completely isolated compliance exercises.
Depending upon the facts, the transaction trail may become:
Property Agreement → Section 393(2) TDS → Section 395 Certificate, if applicable → Form 145, where applicable → Form 141 Schedule E → TDS Certificate → ITR/Capital Gains → NRO Account → Foreign Repatriation
For the current foreign-remittance framework, see our detailed guide on Form 145 and Form 146 Filing – Latest CBDT Update 2026.
TAN Is Removed — But TDS on NRI Property Is Not
This distinction should be highlighted prominently because it is likely to cause confusion after 1 October.
The amendment does not mean:
No TAN = No TDS.
The substantive withholding obligation continues under Section 393(2).
What changes is primarily the procedural mechanism for a specified resident individual/HUF buyer.
CBDT’s Budget FAQ expressly explains that the objective is to reduce the compliance burden by allowing the buyer to deduct and report tax using PAN rather than first obtaining TAN. Etds
For detailed buyer-side and seller-side professional support, refer to our dedicated TDS on Sale of Property – Resident & NRI Service.
Do Not Apply the Normal 1% Property TDS Rule to an NRI Seller
Another mistake to avoid is assuming that because the procedure is becoming PAN-based, the NRI property transaction has now become identical to a resident-seller property transaction.
It has not.
The normal resident-property TDS framework and the non-resident withholding framework remain different.
For a non-resident seller, taxability and withholding must be examined under Section 393(2) and the relevant capital-gain provisions.
The change from 1 October primarily concerns:
TAN → PAN-based reporting through Form 141
It does not by itself convert NRI property TDS into the standard resident-seller 1% mechanism.
For taxpayers transitioning from old Section 195 terminology to the new Income-tax Act, 2025, our Income-tax Act 1961 ↔ 2025 Section Finder can be used to identify corresponding provisions.
Lower TDS Certificate Under Section 395 Remains Extremely Important
For an NRI seller, one of the most important planning tools continues to be the lower or nil TDS certificate.
Suppose an NRI is selling a property for ₹2 crore.
The sale consideration may be ₹2 crore, but the actual taxable capital gain could be substantially lower after considering:
cost of acquisition, eligible improvement expenditure, holding period, capital losses and available capital-gain exemptions.
Allowing tax to be deducted without examining these facts can result in substantial funds being blocked until the NRI files the tax return and receives a refund.
The better approach may be to examine a lower-deduction application before substantial sale consideration is paid.
The new Schedule E expressly provides fields for:
Section 395(1) certificate obtained by the NRI seller, and
Section 395(2) certificate obtained by the buyer. Etds
This confirms that lower-TDS planning remains fully integrated into the new PAN-based system.
For comprehensive NRI tax, capital-gains and repatriation assistance, refer to our NRI Taxation, FEMA & Fund Repatriation Services.
What if the NRI Seller Does Not Have PAN?
Notification No. 121/2026 also specifically deals with this situation.
Schedule E requires overseas information relating to the non-resident seller, including:
foreign address, contact details, Tax Residency Certificate information and foreign Tax Identification Number or other prescribed identification.
The notification further provides that where PAN is unavailable, specified information under Rule 217 must be furnished for the higher-rate TDS provisions to be dealt with appropriately. Etds
This is particularly relevant for overseas property owners who may have acquired property or inherited assets in India long ago but do not presently have an operative Indian PAN.
The position should be reviewed professionally rather than assuming that foreign identification automatically substitutes for PAN in every case.
Form 132 Is Also Being Updated
Notification 121/2026 does not stop at Form 141.
CBDT has also amended Form 132, which is the consolidated TDS certificate corresponding to earlier Forms 16B, 16C, 16D and 16E.
The current Form 132 framework describes it as proof that TDS has been deducted and deposited and enables the recipient to claim the related tax credit. Etds
The new notification modifies Form 132 to accommodate the transaction involving:
transfer of immovable property by a non-resident to a resident individual/HUF. Etds
Thus the entire chain is being aligned:
Deduction → PAN-based challan-cum-statement → TDS certificate → seller’s tax credit
rather than changing only the payment challan.
Property Sold in Instalments? Timing Becomes Critical
The new Schedule E specifically asks whether consideration is being paid:
in lump sum or instalments.
Where instalments are involved, it requires identification of the:
first instalment, subsequent instalment or final instalment, along with previous acknowledgement details where relevant. Etds
This is particularly important for transactions crossing 30 September and 1 October 2026.
For example:
25 September 2026 – advance paid
10 October 2026 – balance paid
15 October 2026 – registration completed
It would be unsafe to assume that the entire transaction automatically falls under the new regime simply because the sale deed is registered after 1 October.
The withholding obligation should be examined by reference to the actual payment/credit events and the law applicable to them.
Transactions straddling the effective date require particular care.
Multiple Buyers? Separate Form Required
The notification also expressly provides that where there is more than one deductor/buyer, every deductor must file a separate form. Etds
This is especially relevant for:
- husband-wife joint purchases;
- parent-child co-buyers;
- jointly financed properties;
- properties acquired by multiple family members.
The buyer’s percentage and seller’s share are important because the form captures proportionate transaction information.
NRI Seller Should Plan the Entire Transaction Before Registration
For an NRI, the tax exercise should not start only when the buyer asks:
“How much TDS should I deduct?”
A properly planned property sale should consider:
residential status → sale consideration → cost → capital gain → exemption → Section 395 lower TDS → payment schedule → Form 145, where applicable → Form 141 → TDS credit → ITR → repatriation
This becomes even more important where the NRI intends to send the sale proceeds abroad.
For the broader relationship between property TDS, Form 144 and foreign-remittance forms, read our earlier article on Buying Property from an NRI – Form 144 and Form 145/146 Explained.
NRI Property Sale and Repatriation Should Be Planned Together
After an NRI sells property, funds will frequently remain in an NRO account before being repatriated overseas.
That creates another compliance stage.
The property TDS process does not automatically complete the requirements for subsequent overseas remittance.
Depending upon the source of funds, tax position and applicable banking requirements, the NRI may separately need to consider:
Form 145, Form 146 CA certification, tax-payment evidence, FEMA documentation and authorised-dealer bank requirements.
For the detailed foreign-remittance framework, refer to Form 145, Form 146 & Form 41 for Foreign Remittance.
For direct professional assistance with remittance certification, see Form 145 & Form 146 CA Certificate for Foreign Remittance.
Practical Checklist for Buyers and NRI Sellers After 1 October 2026
Before completing an NRI property transaction, check:
- Confirm the seller’s residential status for Indian income-tax purposes.
- Compute the expected capital gain before deciding the withholding strategy.
- Consider Section 395 lower TDS before substantial payment is made.
- Plan the payment schedule, especially where the transaction crosses 1 October 2026.
- Confirm PAN/TRC/foreign TIN and seller information required for Schedule E.
- Examine Form 145 applicability because Schedule E now expressly provides for its acknowledgement number where applicable.
- File the correct Form 141 Schedule E under the PAN-based mechanism from the effective date.
- Ensure TDS certificate/credit is correctly reflected, including Form 132 requirements.
- Reconcile the NRI seller’s ITR and capital gains with the property transaction and TDS.
- Plan NRO repatriation separately if the proceeds are ultimately to be transferred overseas.
For TDS filing, reconciliation and non-resident reporting assistance, see our Form 144 and TDS Filing Services under the Income-tax Act, 2025.
Frequently Asked Questions
Is TAN required for buying property from an NRI after 1 October 2026?
For the specified resident individual/HUF buyer, the new framework removes the TAN requirement and introduces PAN-based reporting from 1 October 2026. Etds
Which form will be used after 1 October 2026?
CBDT Notification No. 121/2026 expands Form 141 by adding Schedule E specifically for the relevant purchase of immovable property from a non-resident. Etds
Can I use Form 141 for an NRI seller today?
The amendment becomes effective on 1 October 2026. As of 25 September, the existing Income Tax Department Form 141 manual still says the current form is for resident deductees only. Income Tax Department
Does removal of TAN mean no TDS?
No. The TDS liability under the applicable non-resident provisions continues. Only the specified buyer-side identification/reporting mechanism is being simplified.
Does the normal 1% property TDS automatically apply to an NRI seller?
No. NRI property withholding continues under the non-resident framework and should not be confused with the resident-property TDS regime.
Can an NRI obtain a lower TDS certificate?
Yes, subject to statutory conditions. Schedule E itself provides a field for a certificate under Section 395(1) obtained by the seller. Etds
Can the buyer obtain a determination certificate?
Yes. The new Schedule E also provides for the certificate number under Section 395(2) where obtained by the deductor/buyer. Etds
Does Form 145 become relevant to an NRI property purchase?
It can. The newly notified Schedule E expressly asks for the corresponding Form 145 acknowledgement number where applicable. Etds
What if there are two buyers?
Notification 121/2026 provides that where there is more than one deductor, each deductor must furnish a separate form. Etds
Conclusion: A Major Simplification — But NRI Property TDS Still Needs Careful Planning
CBDT Notification No. 121/2026 finally provides the procedural framework for the important NRI property-TDS change announced in Budget 2026.
From 1 October 2026, an eligible resident individual/HUF buying immovable property from a non-resident will move from the traditional TAN-based compliance system to a PAN-based Form 141 mechanism through new Schedule E. Etds
But the real takeaway is broader:
TAN is removed. TDS is not.
The new Form 141 itself demonstrates how detailed the compliance process has become. It captures the NRI seller’s foreign particulars, property value, capital-gain character, TDS rate, Section 395 certificates and even the corresponding Form 145 acknowledgement where applicable.
Therefore, buyers and NRI sellers should ideally plan:
Capital Gains + Lower TDS + Form 141 + Form 145 + ITR + NRO Repatriation
as one connected transaction rather than dealing with each issue after money has already changed hands.
For professional support covering NRI property sale, capital gains, lower TDS certificates, Form 141, Form 145/146, FEMA and repatriation, refer to our NRI Taxation & FEMA Services and TDS on Sale of Property – Resident & NRI Services.
Official References
CBDT Notification No. 121/2026 dated 22 September 2026 — Income-tax (Fifth Amendment) Rules, 2026, effective 1 October 2026. Etds
CBDT Budget 2026 FAQ — confirms the policy change removing TAN for the specified resident individual/HUF purchasing immovable property from a non-resident from 1 October 2026. Etds
Income Tax Department Form 141 User Manual — useful for understanding the presently operational Form 141 framework; importantly, the current manual still reflects the pre-1 October position. Income Tax Department
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