NRI property TDS rules are set to change from October 1, 2026, bringing a simpler reporting process for resident individuals
and HUFs buying property from an NRI. The Central Board of Direct Taxes (CBDT) has amended the compliance process for such transactions.
Under the new system, eligible buyers will no longer need to obtain a separate TAN for deducting and reporting TDS. However, the responsibility to deduct TDS when applicable will continue.
What Changes From October 1
From October 1, resident individuals and HUFs purchasing immovable property from an NRI will be able to use a PAN-based challan-cum-statement for TDS payment and reporting.
A new Schedule E related to property has also been added to Form 141. Buyers will have to provide details about the property, transaction and NRI seller through this reporting mechanism.
The change is intended to reduce the compliance burden by removing the requirement for a separate TAN in these cases.
Details Buyers Must Report
Buyers will need to keep and provide important information related to the property transaction. This includes the complete property address and the type of property, such as land or a building.
The reporting will also cover buyer and seller details, PAN and contact information, sale price, Stamp Duty Value and whether the payment is being made in one lump sum or through installments.
Details about the TDS deduction will also have to be reported, including the amount and rate of TDS deducted and the date on which the deduction was made.
Installment Payments Also Covered
The new reporting process also applies when the property price is paid in installments instead of a single payment.
Buyers will need to maintain details such as the amount paid in the previous and current installments, the payment date and whether the installment is the first, middle or final payment.
The amount on which TDS was deducted, along with the applicable TDS rate and amount, will also need to be recorded.
TDS Responsibility Still Continues
The removal of the separate TAN requirement does not mean that TDS liability on property purchases from NRIs has been removed.
Buyers still need to follow the applicable TDS requirements when purchasing property from an NRI. Therefore, it is important to collect the seller’s required information before completing the transaction.
This may include the NRI seller’s PAN, foreign address, mobile number and email address.
Depending on the transaction and applicable requirements, documents such as a Tax Residency Certificate (TRC) or Tax Identification Number (TIN) may also be relevant.
Overall, the changes are focused on making the TDS payment and reporting process simpler while keeping the buyer’s tax compliance responsibility intact.
