Written by Ai Powered PMC Akbar Jiwani
Special Correspondent: Real Estate, for Realnewsofindia.com
New Delhi, 5 October 2026: Resident Indians buying a house, flat or plot from a Non-Resident Indian (NRI) have just got a significant compliance relief. Under changes that took effect on 1 October 2026, resident individual and Hindu Undivided Family (HUF) buyers can now deduct and deposit tax on such purchases using only their Permanent Account Number (PAN), without having to first obtain a Tax Deduction and Collection Account Number (TAN).
What has changed
Earlier, a buyer purchasing immovable property from a non-resident seller had to obtain a TAN, deduct tax at source, deposit it and file statements, a procedure many first-time and individual buyers found cumbersome and a common cause of delayed registrations and notices. Under the revised framework notified by the Central Board of Direct Taxes (CBDT), reporting is consolidated through Form 141 (Challan-cum-Statement of Deduction of Tax), which replaces multiple earlier forms.
Who benefits
The relief applies to resident individuals and HUFs buying property from NRIs. Companies and firms purchasing from non-residents will continue to require a TAN.
Tax rates remain unchanged
The simplification concerns procedure, not the tax burden. For non-resident sellers, TDS applies on the capital gains element: 12.5% (plus applicable surcharge and cess) on long-term gains where the property was held for more than 24 months, and at applicable slab rates, up to 30% plus surcharge and cess, on short-term gains. The Rs 50 lakh threshold and 1% TDS rate that apply to resident sellers do not apply when the seller is a non-resident.
Why it matters for real estate
NRIs are a major buyer and seller segment, particularly in Gujarat, Kerala, Punjab, Telangana, Maharashtra and the metro markets. Easier compliance for the resident counterparty should reduce friction in resale transactions, shorten closing timelines and lower the risk of post-registration tax notices. Industry observers expect the change to support sentiment in the secondary market just as the festive season begins, a period that traditionally lifts housing demand. The move also fits the government’s broader emphasis on ease of doing business and transparent, technology-enabled tax administration.
What buyers should do
Buyers should still deduct the correct tax from the sale consideration, deposit it through Form 141 within the prescribed time, and keep the challan as proof. Sellers should obtain the TDS record to claim credit while filing returns. Because the capital gains computation can be complex, both parties are advised to consult a qualified chartered accountant before closing a deal.
Sources: Outlook Money, CAclubindia, A2Z Taxcorp, Pune Pulse, Inkl (reports on CBDT notification, effective 1 October 2026). Please verify figures against the official CBDT notification before publishing.
