Property purchase from NRI gets simpler from October 1: What buyers need to know

Buying a property from an NRI can come with a little more paperwork than a regular property deal. But that is set to change from October 1, as the income tax department is simplifying the TDS process for resident buyers.

From October 1, 2026, resident individuals and Hindu Undivided Families (HUFs) buying an immovable property from a non-resident will no longer need to obtain a separate Tax Deduction and Collection Account Number (TAN) for deducting tax at source (TDS).

Instead, buyers will be able to use their Permanent Account Number (PAN) to deduct, deposit and report the TDS.

The change is part of the transition to the new income-tax law and is aimed at making compliance easier for individuals dealing with non-resident sellers.

Under the existing system, a resident individual or HUF buying immovable property from a non-resident has to deduct TDS and obtain a TAN for the transaction.

For an individual buyer, this can add another compliance step to what is already a large property transaction.

The Income Tax Department had clarified in its Budget 2026 FAQs that this requirement would be removed from October 1, 2026.

The buyer will instead be able to use their PAN for the TDS-related compliance.

The buyers will be able to report the transaction through the PAN-based challan-cum-statement mechanism instead of obtaining a separate TAN. Source: incometaxindia.gov.in The Income Tax Department has said the move will reduce the compliance burden on resident individuals and HUFs, as they can deduct income tax using their PAN. Source: incometaxindia.gov.in TDS ON NRI PROPERTY SALE STILL APPLIES

The change does not mean that TDS has been removed from property transactions involving NRI sellers.

The TDS obligation continues. What changes is the way the buyer has to comply with it.

Buyers will still have to determine the applicable TDS, deduct the tax at the required stage and deposit and report it through the prescribed process.

So, while the paperwork around TAN is being reduced, buyers cannot treat the transaction like a normal property purchase from a resident seller in every respect.

In other words, for buyers, the new rules should make property deals with non-resident sellers simpler and less cumbersome from October 1.- Ends