NRI Property Rules: If you live abroad and are planning to buy land, a house, or a flat in India, this news could be very significant for you. The Central Board of Direct Taxes (CBDT) has revised the rules regarding TDS (Tax Deducted at Source) for such property transactions. These revised rules will come into effect on October 1, 2026. This change will simplify the process for buyers to deposit TDS and report the transaction details.

The government has introduced this new rule with a specific objective: to streamline the compliance process for resident individuals and Hindu Undivided Families (HUFs). Under this rule, if a resident individual or HUF purchases property from an NRI, they will not need to obtain a separate TAN (Tax Deduction and Collection Account Number) for TDS purposes. Instead, TDS details can be submitted using a PAN-based challan-cum-statement. However, the obligation to deduct tax remains unchanged.

When will the rules change?
Resident individuals and HUFs will not be required to obtain a separate TAN. Instead, a PAN-based challan-cum-statement can be used to deposit TDS and report the transaction. A new ‘Schedule E’ related to land transactions has been added to Form 141. This schedule requires the disclosure of details regarding the property, the purchase, and the NRI seller.

What information must be provided in Form 141?
Under the new rules, the buyer is required to provide various essential details regarding the property and the transaction. This may include the NRI seller’s PAN and address, as well as information related to the agreement and registration. Additionally, Form 141 incorporates a reporting system for the transfer of immovable property.

This includes details such as the full property address, the type of property (e.g., land), information about the buyer and seller, PAN and contact details, the sale price, stamp duty value, whether the payment is lump-sum or in installments, the TDS amount and rate, and the date of TDS deduction.

Details required for installment payments

If you are paying the property price in installments rather than a lump sum, payment records must also be included in the reporting. This entails specifying the amount paid in the previous installment, the amount paid in the current installment, whether it is the first, intermediate, or final installment, the payment date, and the amount on which TDS was deducted.

No waiver of TDS obligations

The rule changes do not imply that the obligation to deduct TDS when purchasing property from a foreign national has been eliminated. While the new rules will certainly simplify the TDS process, the buyer’s responsibility remains intact. Therefore, before purchasing property from an NRI, it is crucial to have details ready—such as their PAN, overseas address, mobile number, email, and TIN (Taxpayer Identification Number), if applicable.