{"id":1626,"date":"2026-08-31T08:35:15","date_gmt":"2026-08-31T04:05:15","guid":{"rendered":"https:\/\/caalokkumar.com\/my-writing\/?p=1626"},"modified":"2026-08-31T08:35:20","modified_gmt":"2026-08-31T04:05:20","slug":"tds-on-purchase-of-property-from-nri","status":"publish","type":"post","link":"https:\/\/caalokkumar.com\/my-writing\/tds-on-purchase-of-property-from-nri\/","title":{"rendered":"TDS on Purchase of Property from NRI in 2026: TAN Required Till 30 September, PAN-Based Rule from 1 October"},"content":{"rendered":"\n

TDS on Purchase of Property from NRI<\/strong> is one of the most misunderstood property-tax compliances in India. A buyer may assume that the normal 1% property TDS rule applies, make payment and proceed with registration. But if the seller is a non-resident, the TDS rules are very different.<\/p>\n\n\n\n

A major compliance change is now approaching:<\/p>\n\n\n\n

1 October 2026<\/h2>\n\n\n\n

Up to 30 September 2026, a resident individual or HUF buying immovable property from a non-resident seller generally requires TAN for TDS compliance. From 1 October 2026, such eligible buyers will no longer be required to obtain TAN and will be able to use a PAN-based mechanism.<\/strong><\/p>\n\n\n\n

The change has been enacted through the Finance Act, 2026 by amending Section 397 of the Income-tax Act, 2025. Readers can verify the amended statutory provision directly from the Income-tax Act, 2025 as amended by Finance Act, 2026<\/a>.<\/p>\n\n\n\n

CBDT has also specifically clarified the change, its scope and its effective date of 1 October 2026 in its official Budget 2026 FAQ on TAN requirement for NRI property transactions<\/a>.<\/p>\n\n\n\n

But there is one point every buyer should understand:<\/p>\n\n\n\n

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TAN is being removed. TDS is not.<\/strong><\/p>\n<\/blockquote>\n\n\n\n

The TDS obligation on purchase of property from an NRI continues. The amendment primarily simplifies the compliance mechanism for eligible resident individual\/HUF buyers.<\/p>\n\n\n\n

For a broader understanding of the present process, you may also read our earlier detailed guide on Buying Property from an NRI in India \u2013 Form 144, TAN and Form 145\/146 Explained<\/a>.<\/p>\n\n\n\n

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TDS on Purchase of Property from NRI: What Changes From 1 October 2026?<\/h2>\n\n\n\n
Particular<\/th>Up to 30 September 2026<\/th>From 1 October 2026<\/th><\/tr><\/thead>
Seller<\/td>Non-resident<\/td>Non-resident<\/td><\/tr>
Buyer covered by relaxation<\/td>Resident Individual\/HUF<\/td>Resident Individual\/HUF<\/td><\/tr>
TAN required<\/td>Yes<\/strong><\/td>No<\/strong><\/td><\/tr>
PAN required<\/td>Yes<\/td>Yes<\/td><\/tr>
TDS liability<\/td>Continues<\/td>Continues<\/td><\/tr>
Normal 1% resident-property TDS rule<\/td>Not automatically applicable<\/td>Not automatically applicable<\/td><\/tr>
\u20b950 lakh resident-property threshold<\/td>Not applicable in the same manner<\/td>Same<\/td><\/tr>
Lower TDS mechanism<\/td>Available<\/td>Available<\/td><\/tr>
Governing non-resident provision<\/td>Section 393(2)<\/td>Section 393(2)<\/td><\/tr>
Buyer identification<\/td>TAN<\/td>PAN-based mechanism<\/td><\/tr>
Reporting<\/td>Existing non-resident mechanism<\/td>PAN-based challan-cum-statement as notified<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The amendment is therefore primarily a compliance simplification<\/strong> and should not be mistaken for a reduction or abolition of TDS.<\/p>\n\n\n\n

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Rule 1: TAN Is Still Required Until 30 September 2026<\/h1>\n\n\n\n

The most important immediate rule is simple:<\/p>\n\n\n\n

Buying property from an NRI before 1 October 2026? Do not assume TAN has already been abolished.<\/h3>\n\n\n\n

Section 397 of the Income-tax Act, 2025 generally requires persons deducting or collecting tax to obtain a Tax Deduction and Collection Account Number \u2014 TAN<\/strong>, unless a specific exemption applies.<\/p>\n\n\n\n

The Finance Act, 2026 has now introduced such an exemption for a resident individual or HUF purchasing immovable property from a non-resident<\/strong>, but the amendment becomes effective only from:<\/p>\n\n\n\n

1 October 2026<\/h2>\n\n\n\n

CBDT’s official Budget FAQ confirms that under the present provision, a resident individual\/HUF buyer purchasing property from a non-resident is required to obtain TAN. It further confirms that the relaxation begins from 1 October 2026.<\/p>\n\n\n\n

Therefore, transactions involving payment or TDS obligations arising up to 30 September 2026<\/strong> should continue to be handled under the existing TAN-based framework.<\/p>\n\n\n\n

For end-to-end buyer-side compliance including TAN, TDS deposit, Form 144 and TDS reconciliation, see our TDS Filing \u2013 Form 138, Form 140 & Form 144 services<\/a>.<\/p>\n\n\n\n

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Rule 2: From 1 October 2026, Eligible Buyers Can Use PAN Instead of TAN<\/h1>\n\n\n\n

From 1 October 2026<\/strong>, compliance becomes substantially easier for specified buyers.<\/p>\n\n\n\n

The amended Section 397 specifically exempts a:<\/p>\n\n\n\n