Buying Property from an NRI After 1 October 2026? New Form 141 (Schedule E) TDS Rules Without TAN Explained
Purchasing real estate in India from a Non-Resident Indian (NRI) has historically been an administrative headache for individual buyers.
Effective 1 October 2026, via CBDT Notification No. 121/2026 (notifying the Income-tax (Fifth Amendment) Rules, 2026), the government fundamentally simplified this process. Resident individuals and HUFs can now deduct, report, and pay TDS on property acquired from NRIs without obtaining a Tax Deduction and Collection Account Number (TAN).
1. What Changed on 1 October 2026?
| Compliance Requirement | Old Regime (Prior to 1 Oct 2026) | New Regime (From 1 Oct 2026 Onwards) |
|---|---|---|
| Buyer TAN Requirement | Mandatory to apply for and obtain a TAN | No TAN required for resident Individuals & HUFs |
| Reporting Form | Quarterly withholding return in Form 27Q | Single challan-cum-statement in Form No. 141 |
| Schedule Applied | Complex multi-page corporate schedules | Newly inserted Schedule E of Form 141 |
| TDS Certificate | Manual quarterly issuance of Form 16A | Automated system-generated Form No. 131 |
| Filing Window | Quarterly return deadline | Within 30 days from the end of the month of deduction |
2. 6 Mandatory Data Points Required in Schedule E of Form 141
When filing Form 141 for an NRI real estate transaction, buyers must provide:
- Overseas Contact Details of the NRI Seller: Full residential street address in foreign jurisdiction, country code, and overseas postal/ZIP code.
- Tax Residency Certificate (TRC) & Foreign TIN: Foreign Tax Identification Number and TRC reference issued by the overseas tax authority.
- Property Valuation Metrics: Complete property address, circle rate / stamp duty value, and negotiated agreement value.
- Section 395 Lower/Nil Deduction Certificate: If the NRI seller obtained a lower deduction certificate from their International Taxation Assessing Officer, the certificate number must be validated.
- Tax Computation Breakdown: Itemized deduction of basic tax rate, applicable surcharge (based on capital gain brackets), and 4% Health & Education Cess.
- Automated TDS Certificate Generation: Once Form 141 is processed, TDS Certificate Form No. 131 is generated on TRACES within 15 days.
3. High-Risk Pitfalls for Property Buyers
- Not Verifying Residential Status: Never assume a seller is a resident based on an Indian passport. If the seller qualifies as a Non-Resident under Section 6 of the Act, deducting 1% under resident rules will lead to the buyer being treated as an "assessee in default" for the 20%+ surcharge shortfall!
- Circle Rate Higher Than Sale Price: If the stamp duty value exceeds the agreed consideration by more than 10%, TDS must be computed on the higher stamp duty valuation under Section 50C rules.
4. Seamless NRI Property TDS With RegisterYourFirm
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