Property Purchase: New TDS Reporting Rules From October 1, 2026 — What Buyers of Property From NRIs Need to Know

Buying a house, flat or plot is already a paperwork-heavy process. When the seller is a Non-Resident Indian (NRI), the tax compliance requirements can make the transaction even more complicated. One important change is now set to reduce some of this burden for eligible resident individuals and Hindu Undivided Families (HUFs).

From October 1, 2026, eligible buyers purchasing immovable property from an NRI will be able to use their Permanent Account Number (PAN) for certain TDS reporting requirements instead of obtaining a separate Tax Deduction and Collection Account Number (TAN).

However, there is an important point buyers should understand: the removal of the separate TAN requirement does not remove the responsibility to deduct and deposit TDS. The buyer will still have to comply with the applicable tax rules and report the transaction correctly.

What Is Changing From October 1?

Under the rules applicable before October 1, a resident individual or HUF purchasing property from an NRI generally had to obtain a TAN to carry out the required TDS compliance.

For a person buying a property for personal use, obtaining a separate TAN for what could be a single property transaction created additional paperwork and administrative work.

The Central Board of Direct Taxes (CBDT) has now changed the reporting mechanism. From October 1, 2026, eligible resident individuals and HUFs will be able to use their PAN for the relevant TDS reporting instead of obtaining a separate TAN.

The change is linked to payments covered under Section 393(2) of the Income-tax Act, 2025.

In simple terms, the government is attempting to make the reporting process easier for eligible property buyers while keeping the underlying TDS obligation in place.

What Does This Mean for a Property Buyer?

Suppose you are a resident individual and are purchasing a house or piece of land from an NRI.

Under the earlier process, you could be required to obtain a TAN before handling the TDS compliance connected with the transaction. This meant an additional registration and documentation requirement.

From October 1, eligible buyers can instead use their PAN through the prescribed reporting mechanism.

This is particularly relevant for people who are buying a property for themselves and are not regularly involved in transactions requiring TAN-related compliance.

The change therefore reduces one administrative step. But buyers should not interpret it as a tax exemption.

TDS still has to be deducted, deposited and reported according to the applicable rules.

How Will TDS Be Reported From October 1?

Under the new mechanism, eligible buyers will be able to use Form 141, described as a challan-cum-statement, for reporting and depositing the applicable TDS.

A challan-cum-statement combines payment and reporting information into a single compliance process.

The buyer will have to provide relevant information about the transaction, including details connected with:

• The buyer

• The property

• The NRI seller

• The payment

• TDS deducted

• The seller's PAN

• Relevant capital-gain information

The seller's PAN becomes particularly important because the buyer needs accurate information while completing the reporting process.

Therefore, buyers should obtain and verify the seller's PAN and tax-residency status before completing the transaction.

Why Is the Change Important for Ordinary Buyers?

For an ordinary person purchasing a home, the biggest benefit is the reduction in paperwork.

Imagine someone buying a property from an NRI but having no other reason to obtain a TAN. Having to obtain a separate tax number merely to complete one property transaction could add time and administrative complexity.

The new system allows eligible buyers to use their existing PAN for the relevant reporting process.

This can make compliance more straightforward and reduce the number of separate registrations involved in the transaction.

However, buyers should remember that simpler reporting does not mean simpler responsibility.

The buyer must still calculate the applicable TDS correctly, deduct it at the appropriate stage, deposit it within the prescribed timeline and submit the required information.

A mistake in the amount deducted or a failure to deposit the tax can still create compliance problems.

What About Capital Gains?

Another important part of the new reporting process concerns the nature of the capital gain arising from the property transaction.

When property is sold by an NRI, the transaction can involve capital gains. The reporting process may therefore require information regarding whether the gain is treated as long-term or short-term capital gain, as applicable under the prevailing tax provisions.

This means buyers should not treat the transaction simply as a property purchase.

The tax status of the seller and the nature of the transaction are important when completing the required TDS documentation.

Because NRI property transactions can involve additional tax considerations, buyers may need professional assistance where the transaction is complex.

What Happens If There Are Multiple Buyers?

Joint property purchases require additional attention.

If two or more people jointly purchase a property from an NRI, buyers should not assume that one filing will automatically cover everyone.

Under the new reporting framework described for these transactions, each buyer may need to submit a separate report and Form 141.

This makes it particularly important for joint purchasers to keep their individual PAN details and transaction information ready.

For example, if three people jointly purchase a property, each person's reporting requirements should be checked rather than assuming that one buyer can complete everything on behalf of the others.

What Buyers Should Prepare Before October 1

Anyone planning to purchase property from an NRI should start collecting the necessary information before the transaction is completed.

Important details can include:

1. Buyer's PAN
   Ensure that the PAN details of every buyer are accurate.

2. Seller's PAN
   Obtain the NRI seller's correct PAN and verify the details.

3. Seller's residential status
   Confirm that the seller's tax-residency status is correctly understood.

4. Property details
   Keep the property's relevant identification and transaction details available.

5. Payment details
   Maintain accurate records of the agreed consideration and payments made.

6. TDS calculation
   Determine the applicable TDS requirement before making the relevant payment.

7. Capital-gain information
   Keep the information required for reporting the nature of the seller's capital gain available.

8. Joint buyer information
   If there are multiple purchasers, check the reporting requirement applicable to each buyer.

Does This Change Property Registration or Ownership Rules?

No. The major change discussed here is related to TDS reporting and compliance.

It does not, by itself, change the ordinary process of purchasing property, transferring ownership or registering the property.

Therefore, buyers should not confuse the new TDS reporting mechanism with a change in property-registration rules.

The sale agreement, payment records, stamp duty, registration requirements and other applicable property-related formalities continue to need attention.

A Simpler Process, But Not a Tax-Free Transaction

The October 1, 2026 change is primarily designed to reduce the administrative burden for eligible resident individuals and HUFs purchasing immovable property from NRI sellers.

The most important difference is that eligible buyers can use their PAN instead of obtaining a separate TAN for the relevant TDS reporting process.

But the fundamental tax responsibility remains.

Buyers still need to ensure that the correct TDS is deducted, deposited and reported. They also need to provide accurate information about the buyer, seller, property, payment and other required details through the prescribed form.

For anyone planning such a transaction, preparing the documents and verifying the seller's tax details before October 1 can help avoid last-minute problems.

In short, the new rule makes the reporting process more convenient—but buyers still need to take their TDS obligations seriously.