From 1 October 2026, an NRI property sale to a resident individual or HUF buyer no longer needs the buyer to hold a TAN; a PAN is enough. Your TDS doesn't shrink, though: the rate, and the deduction on the full price, stay the same. The paperwork you owe the buyer is what changes.
What changed on 1 October 2026
The CBDT issued the Income-tax (Fifth Amendment) Rules, 2026 on 22 September 2026 as Notification No. 121/2026, also published as G.S.R. 830(E). The rules took effect on 1 October 2026.
A TAN (Tax Deduction Account Number) is the registration a buyer needs before deducting tax from a payment to a non-resident. The exemption itself sits in section 397(1)(c) of the Income-tax Act, 2025, as amended by the Finance Act, 2026, which came out of the Budget 2026 changes for NRIs.
The new rules add the form that makes it work: a Schedule E in Form 141 for tax deducted on property bought from a non-resident.
Who can skip the TAN
The PAN route covers a narrow group. All three conditions have to hold:
- The buyer is a resident individual or a Hindu undivided family (HUF).
- The property is land other than agricultural land, a building, part of a building, or both.
- The seller is a non-resident, and the buyer deducts tax under section 393(2) (Table Sl. No. 17) of the Income-tax Act, 2025.
Companies, firms, LLPs, trusts and non-resident buyers don't qualify. They still need a TAN and report through the regular quarterly TDS statement.
The old route and the new route
Payments made up to 30 September 2026 stay on the TAN route. If you're paid in instalments across that date, Schedule E records instalment details, so ask the buyer's CA which route covers each payment.
| Up to 30 September 2026 | From 1 October 2026 (individual or HUF buyer) | |
|---|---|---|
| Buyer's identifier | TAN, obtained before paying | PAN |
| Where the buyer reports | Quarterly TDS statement | Form 141, Schedule E |
| Certificate you receive | TDS certificate | Form 132 |
| Joint buyers | Each needed a TAN for their share | Each files a separate Form 141 |
| TDS rate and threshold | Unchanged | Unchanged |
How the new rules change an NRI property sale
Your TDS bill is unchanged
The buyer still deducts on the whole sale price, not on your gain, and no Rs 50 lakh threshold applies to an NRI seller. The full NRI TDS rates sit in a separate guide.
Long-term gains, on property held over 24 months, carry a base rate of 12.5% since 23 July 2024 under the Finance Act, 2024, plus surcharge and cess.
Take Rahul, an NRI in Texas who sells a Pune flat he has held for six years.
Worked example: Rahul's flat sale
- Sale price: Rs 2 crore
- Purchase cost: Rs 1.5 crore, so the gain is Rs 50 lakh
- TDS the buyer withholds: roughly 14.95% of Rs 2 crore, about Rs 29.9 lakh
- Tax on the gain: about Rs 7.47 lakh (12.5% plus surcharge and cess)
- Excess TDS he claims back through his Indian return: about Rs 22.4 lakh
Those figures are illustrative and depend on your own holding period and income.
What the buyer's form asks about you
Schedule E records the seller's details next to the property and the payment. Expect the buyer to ask you for:
- Your PAN, if you have one, and your name and status as an individual.
- A contact number and an email address.
- Your overseas address.
- If you have no PAN, your tax residency certificate number and your tax identification number in the country where you live.
Without a PAN, the buyer needs your residency details to avoid deducting at a higher rate.
The lower deduction certificate still moves the most cash
A lower TDS certificate from the assessing officer matters more than the buyer's choice of PAN or TAN. It has to be in hand before the sale is registered, and it can't be backdated.
I'd put the TDS route into the sale agreement: who deducts, which form the buyer files, and which certificate, if any, sets the rate. It costs one clause, and it settles the question before money moves.
What to do before you sign
- Ask the buyer's status first. An individual or HUF can use a PAN. A company or firm needs a TAN, and applying for one is a separate step before any payment.
- Decide on the lower deduction certificate. Apply to the assessing officer before registration, with a projected capital gains working and your purchase cost papers.
- Send the buyer your details for Schedule E. Include your overseas address, email, phone number and PAN, plus residency details if you have no PAN.
- Collect the Form 132 certificate after payment. Check that the tax shows in your Form 26AS and AIS. If it doesn't, the buyer needs to correct the filing before you file your return.
- Plan the refund and the remittance. File your Indian return to claim back excess TDS, then complete Form 15CA and 15CB before sending funds abroad. It helps to plan the tax before you sell.
These rules are recent and can change, so have a chartered accountant confirm the route for your deal.
Your first move
For any NRI property sale, ask the buyer which route they're taking before you sign, and start the lower deduction certificate that same week. I'd rather you lose a few days to paperwork than wait on a refund of roughly 15% of the price. If you want the numbers checked first, InvestMates can run them.
Frequently asked questions
Is TAN required for NRI to sell property in India?
No, you don't need a TAN as the seller, because the buyer deducts and deposits the TDS. From 1 October 2026 the buyer doesn't need one either when the buyer is a resident individual or HUF, since a PAN is enough. Companies, firms and other entities buying from you still need a TAN.
Who will pay 1% TDS on sale of property?
The buyer pays it, but only when the seller is a resident and the price meets the Rs 50 lakh threshold. Neither the 1% rate nor the threshold applies to an NRI seller. Your buyer deducts at non-resident rates on the whole price, and capital gains tax for NRIs explains the rest.
Can a company or LLP buy property from an NRI without a TAN?
No, the PAN route covers only resident individuals and HUFs. Companies, firms, LLPs, trusts and non-resident buyers still need a TAN and report through the regular quarterly TDS statement. If your buyer is an entity, ask for the TAN before the sale agreement is signed.
Do joint buyers each need to file Form 141 when buying property from an NRI?
Yes, each joint buyer files a separate Form 141 and complies as a deductor for their own share. Schedule E records each buyer's PAN and share of the consideration, and the shares add up to 100%.
Do I still need Form 15CA and 15CB to repatriate property sale proceeds after the TAN change?
Yes, the 1 October 2026 change covers how the buyer deducts and reports TDS, and the notification doesn't touch repatriation. Property sale proceeds are a capital account remittance, so the usual CA-certified Form 15CA and 15CB process applies. NRO account repatriation stays capped at USD 1 million per financial year.