Buying or selling property in India can involve several tax and compliance steps, especially when the property owner is an NRI. One important change is coming into effect from October 1, 2026, which will make the TDS process simpler for resident individuals and Hindu Undivided Families (HUFs) buying property from NRIs.
Under the new rule, the buyer will no longer need to obtain a Tax Deduction and Collection Account Number (TAN) only for deducting TDS on the purchase of immovable property from a non-resident seller. Instead, the buyer can use their PAN for the required tax deduction and reporting process. The change has been introduced under the Income-tax Act, 2025.
However, NRIs should understand one important point: removal of the TAN requirement does not mean that TDS itself has been removed. The tax deduction requirements for an NRI property transaction continue to apply.
What Is Changing From October 1, 2026?
Until September 30, 2026, when a resident individual or HUF purchases immovable property from an NRI, the buyer is required to obtain TAN for the TDS process.
From October 1, 2026, this additional requirement will be removed.
The buyer will be able to deduct and report the applicable TDS using their PAN. The government has stated that the process will become similar to the existing PAN-based process used in certain property transactions involving resident sellers.
This is mainly a compliance change, not a removal of the tax obligation.
In simple words:
Earlier:
NRI seller → Property buyer → TAN required for the applicable TDS process
From October 1, 2026:
NRI seller → Property buyer → PAN-based TDS reporting
This can reduce paperwork for buyers and make the transaction process easier.
Does This Mean TDS Is No Longer Required on NRI Property?
No.
This is one of the most important things buyers and NRI property owners should understand.
The government has removed the TAN requirement, not the TDS requirement. When an NRI sells immovable property in India, the buyer still needs to consider the applicable TDS provisions.
The Income Tax Department states that when a non-resident sells immovable property in India, the buyer is required to deduct tax at source under the applicable provisions. The actual rate can depend on factors such as the nature of the capital gain and other applicable tax provisions.
Therefore, an NRI should not assume that the October 2026 change means the entire TDS process has disappeared.
Why Is This Rule Important for NRIs?
For many NRIs, selling property in India involves coordination between the buyer, seller, tax professional, bank, and sometimes a property management or legal service provider.
Earlier, the TAN requirement could add another compliance step for the buyer.
Removing this requirement can make the process more straightforward, particularly for individuals who purchase property directly from an NRI seller.
For NRIs living in the USA, UK, Canada, Australia, UAE and other countries, such changes can be useful because property transactions often have to be managed remotely.
However, tax calculations and documentation still need proper attention.
What Should an NRI Seller Keep Ready?
Even though the buyer’s TAN requirement is being removed, an NRI seller should still keep important property and tax documents ready.
These may include:
- PAN card
- Passport and proof of NRI status
- Property ownership documents
- Purchase deed
- Sale agreement
- Previous purchase documents
- Details of property acquisition cost
- Improvement and renovation records, where relevant
- Bank details
- Capital gains-related documents
- Lower or nil deduction certificate, if applicable
- Power of Attorney documents, where someone is handling the transaction in India
Having these documents available can help reduce delays during the sale process.
What About Lower or Nil TDS Certificates?
The removal of TAN should not be confused with the process of obtaining a lower or nil TDS certificate.
An NRI seller may, where eligible, explore the applicable procedure for reducing the amount of tax deducted at source.
The tax amount deducted at the time of sale may not always represent the seller’s final tax liability. Capital gains, purchase cost, improvements, holding period and other applicable provisions can affect the final tax calculation.
Because of this, an NRI planning to sell property should review the tax position before completing the transaction rather than waiting until the registration date.
What Should Property Buyers Do After October 1, 2026?
A buyer should still take the TDS process seriously.
The new rule removes one compliance requirement, but the buyer should still:
- Confirm whether the seller is a resident or non-resident.
- Check the applicable TDS provisions.
- Collect the required PAN and property transaction details.
- Calculate the applicable tax correctly.
- Deduct the required amount from the payment.
- Deposit the tax through the prescribed process.
- Complete the required reporting and documentation.
- Keep payment and TDS records safely.
The Income Tax Department has also introduced Form 141 under the Income-tax Act, 2025 for specified PAN-based TDS reporting. The department describes it as a unified challan-cum-statement for certain transactions covered under Section 393(1).
Since tax procedures can change, buyers should check the latest instructions on the Income Tax Department portal or take professional advice for a specific transaction.
How Can NRIs Manage Property Transactions From Abroad?
Property transactions become more difficult when the owner is living outside India and cannot personally visit the property, meet buyers or handle documentation.
This is where professional support can be useful.
NRIs can explore reliable NRI Services in India for assistance with property-related coordination, documentation support, local supervision and other services depending on their needs.
For owners who continue to hold property in India, nri property management in india can also help with regular property supervision, maintenance, tenant coordination and other practical responsibilities.
Professional support does not replace tax or legal advice, but it can make it easier for an NRI to manage local responsibilities while living abroad.
A Simple Example
Suppose an NRI owns a residential property in India and decides to sell it to a resident individual.
If the transaction falls under the applicable NRI property TDS provisions, the buyer has to follow the required TDS process.
For transactions covered by the new rule from October 1, 2026, the buyer will not need to obtain TAN merely because the seller is an NRI. Instead, the buyer will use the PAN-based process prescribed for reporting and depositing the tax.
The tax liability itself should still be calculated according to the applicable provisions.
This distinction is important because TAN removal does not mean TDS removal.
What NRIs Should Remember About the 2026 Rule
The October 1, 2026 change is mainly intended to reduce the compliance burden involved in property transactions where the seller is a non-resident.
The key points are:
- TAN requirement for the specified NRI property transaction is removed from October 1, 2026.
- The change applies to resident individuals and HUFs covered by the provision.
- Buyers can use their PAN for the prescribed TDS reporting process.
- TDS obligations themselves continue to apply.
- Property sellers should keep their tax and ownership documents ready.
- NRIs should check the applicable tax rate and capital gains position before selling.
- Professional tax or legal advice may be useful for transactions involving large amounts or complicated ownership.
Final Thoughts
The new NRI property rule from October 1, 2026 can make the TDS compliance process simpler for resident buyers purchasing immovable property from non-resident sellers.
But NRIs should not treat the change as a complete removal of tax responsibilities. The TAN requirement is being removed; the applicable TDS and reporting obligations remain.
If you are an NRI planning to sell, buy, rent or manage property in India, understanding the latest rules before taking action can help you avoid unnecessary delays and compliance problems.
For property owners living abroad, proper local support can also make day-to-day property responsibilities easier to manage while keeping important documents and transactions organised.
