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NRI property TDS: TAN rule ends Oct 2026, PAN-based system from Oct 1
Resident buyers of NRI property won't need TAN after Oct 1, 2026. TDS rules remain unchanged. Experts explain the current process, lower deduction certificates, and timing for sellers.
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Resident individuals and HUFs buying immovable property from an NRI will no longer need a Tax Deduction Account Number (TAN) from October 1, 2026. The tax deduction obligation itself remains unchanged, but the reporting mechanism shifts from a TAN-based process to a PAN-based challan, similar to resident-to-resident transactions.
Amit Prakash, CBO of Urban Money, said that from October 1, resident buyers purchasing property from NRI sellers will be able to deposit TDS through a PAN-based challan, the same mechanism used for resident-to-resident property deals. The obligation to deduct tax stays with the buyer; what changes is the account number used for reporting.
CA Parag Jain, Tax Head at 1 Finance, said the Finance Bill 2026 amends Section 397(1)(c) of the Income Tax Act, 2025 to exempt resident individual and HUF buyers from obtaining a TAN when buying immovable property from a non-resident seller. The relief does not extend to companies, firms or LLPs buying property from an NRI; they will continue to require a TAN.
Until September 30, 2026, obtaining a TAN is mandatory for resident individuals buying from an NRI. Jain said the applicable route is Form 144, the renumbered Form 27Q, a quarterly return filed through the TIN-Protean utility that cannot be filed without a TAN. The compliance structure was designed for regular tax deductors such as employers and businesses, Jain noted. A buyer purchasing a house may have only a one-time TDS obligation yet still has to apply for a TAN, wait for its allotment and file the required quarterly return. Prakash said that for a one-time property purchase, this can involve several additional compliance steps.
There is no ₹ 50 lakh threshold for TDS when a resident buyer purchases property from an NRI seller. Jain said this is one of the biggest differences between transactions involving resident and non-resident sellers. For a resident seller, TDS generally applies where the consideration or stamp duty value is ₹ 50 lakh or more, at 1% of the consideration. For a non-resident seller, TDS applies from the first rupee. A ₹ 30 lakh property bought from an NRI attracts deduction, whereas the same property bought from a resident seller would not attract TDS if it remains below the ₹ 50 lakh threshold.