Buying a Flat From an NRI? From 1 October 2026 You No Longer Need a TAN

From 1 October 2026, resident individuals and HUFs buying property from an NRI can pay TDS with their PAN through Form 141 Schedule E. What changed and what didn't.

Aerial view of high-rise residential towers in Byculla East, Mumbai

For years, the most tiresome part of buying a flat from an NRI was the TAN. A one-time buyer had to apply for a tax deduction account number, as if they were running a business, just to deduct tax on one purchase. That requirement is gone for most home buyers.

What changed on 1 October 2026?

CBDT notified the Income-tax (Fifth Amendment) Rules, 2026, reported as Notification No. 121/2026 dated 22 September 2026 (TaxQueries, Setindiabiz):

Form 141, the PAN-based challan-cum-statement, gets a new Schedule E for property bought from a non-resident.
A resident individual or HUF buying immovable property from a non-resident can deduct and pay the TDS using their PAN, without a separate TAN.
It applies to payments from 1 October 2026. Earlier payments followed the TAN-based route.

What hasn't changed?

The TDS rate. Buying from an NRI still means deducting at the non-resident rate on the full sale price, with no Rs 50 lakh threshold. The resident 1% rule doesn't apply.
The buyer's responsibility. You still deduct, deposit, report and give the seller the TDS certificate.
The lower deduction certificate. If the seller has a Form 128 certificate, you deduct at the rate it states.

The rates are explained in our post on TDS when an NRI sells a flat.

The paperwork got lighter, not the responsibility. You still deduct the right tax, on the full price, before you pay.

Step by step for buyers from 1 October 2026

Confirm the seller's residential status in writing, with their PAN.
Ask for a lower deduction certificate if the seller has one, and check the rate and validity.
Work out the TDS on each payment to the seller, at the non-resident rate or the certificate rate.
Pay through Form 141, Schedule E, using your PAN, and save the acknowledgement.
Issue the TDS certificate to the seller so they get credit.

If the buyer is a company, or is itself a non-resident, check with your CA whether the new route applies; the change is described for resident individuals and HUFs.

What this means for you

Buyers: one less form, but the same care on the amount. Use our NRI TDS calculator.
NRI sellers: buyers who were put off by the TAN step may now be more willing. A Form 128 certificate still makes the deal smoother.
Both: agree in the sale agreement who calculates TDS and how it's evidenced. Our buy and sell desk builds this in.

World Towers and neighbouring high-rises in Worli, Mumbai — Selling from abroad? See NRI property services.

Frequently asked questions

Do I need a TAN to buy property from an NRI?

From 1 October 2026, a resident individual or HUF buyer can pay TDS with their PAN through Form 141 Schedule E, without a separate TAN.

Has the TDS rate on buying from an NRI changed?

No. The non-resident rate still applies to the full sale price, unless the seller has a lower deduction certificate.

Does the 1% TDS rule apply when buying from an NRI?

No. The 1% rate and Rs 50 lakh threshold apply only when the seller is a resident.

Related reading

Buying from an NRI seller? Book a video call or WhatsApp me.

Warmly,
Yanik

General information, not tax advice. Please confirm the procedure with your chartered accountant.

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