Paying TDS on property bought from an NRI is getting easier. From 1 October 2026, you don't need a TAN for it. You can pay and report the TDS through Form 141 using your own PAN, just like when you buy from a seller who lives in India.
This comes from CBDT Notification 121/2026, issued on 22 September 2026. Here's what changed, how much TDS to deduct, and what to keep ready.
Based on the notification published on 22 September 2026. The new form goes live on 1 October, so check the income tax portal before you file. For a large deal, confirm the TDS rate with a CA.
What Notification 121/2026 changes
Before 1 October, a buyer had to:
- Get a TAN, even for a one-time purchase.
- Pay the TDS by challan.
- File a quarterly TDS return (Form 144, earlier Form 27Q).
From 1 October, a resident individual or HUF buyer just:
- Files Form 141 on their PAN. It now has a new section, Schedule E, for non-resident sellers.
- Gives the seller a TDS certificate, Form 132.
That's it. No TAN, no quarterly returns.
Who can use Form 141 for a non-resident seller
- Buyer: a resident individual or HUF. Companies, firms and trusts still need a TAN.
- Seller: any non-resident: an NRI, a foreign company, or anyone else living abroad.
- Property: a flat, house, plot, shop or other building or land (not farm land).
If you deduct the TDS before 1 October, use the old TAN process.
How much TDS to deduct: Section 393(2) rates
This is where people make mistakes. For a seller living in India, TDS is just 1%, and only on property worth ₹50 lakh or more. For a non-resident seller, it's much higher, and there's no ₹50 lakh limit. This TDS falls under section 393(2) of the new Income-tax Act (earlier section 195). For TDS codes on other payments, see our Section 393(1) payment codes guide.
You deduct TDS on the full price, at:
- 12.5% if the seller owned the property for more than 2 years.
- 30% (for an individual seller) if they owned it for 2 years or less.
Then add:
- Surcharge: 10% of the tax if the price is above ₹50 lakh, 15% if above ₹1 crore.
- Cess: 4%.
Example: You buy a flat for ₹80 lakh from an NRI who has owned it for 6 years. TDS rate = 12.5% + 10% surcharge + 4% cess = 14.3%. You deduct ₹11,44,000 and pay the seller ₹68,56,000.
Two things can change the rate:
- Lower TDS certificate: The seller can apply to the tax department for a certificate that allows lower TDS (Form 128, earlier Form 13). If they give you one, use the rate on it.
- No PAN: If the seller has no PAN, TDS goes up to at least 20%. To avoid this, the seller can give you their foreign tax ID number, tax residency certificate, and contact details instead.
| Seller lives in India | Seller is an NRI | |
|---|---|---|
| TDS rate | 1% | 12.5% or 30%, plus surcharge and cess |
| Minimum price for TDS | ₹50 lakh | None |
| TAN needed? | No | No, from 1 Oct 2026 |
| Form | Form 141 | Form 141, Schedule E |
What Form 141 Schedule E asks for
Keep these ready before you file:
- Property: address, type (land, building or both), agreement date, and registration date.
- Price: total sale price and stamp duty value. Say whether you're paying in one go or in instalments.
- Buyers: PAN, name, and each buyer's share.
- Seller: PAN (if they have one), name, phone number, email, and address abroad. The phone, email and foreign address are needed even if the seller has a PAN.
- If the seller has no PAN: their tax residency certificate number and foreign tax ID.
- Tax: amount paid, date, TDS rate, and TDS amount (including surcharge and cess).
- Certificate number, if the seller has a lower TDS certificate.
If there are two or more buyers, each buyer files their own Form 141.
Form 132: the TDS certificate for the seller
After you file Form 141, download Form 132 from the TRACES website and give it to the seller. It replaces the old Form 16B. Give it within 15 days of the Form 141 due date. The seller uses it to claim the TDS when they file their tax return in India.
Checklist for buying property from an NRI
Before you sign
- Confirm the seller is a non-resident. If so, 1% TDS is wrong.
- Get the seller's PAN. If they don't have one, get their foreign tax ID and tax residency certificate.
- Get the seller's phone number, email and address abroad.
- Ask when they bought the property (more than 2 years ago, or less).
- Ask if they have a lower TDS certificate. Get a copy before you pay.
When you pay
- Deduct TDS on every payment, including the token amount and each instalment.
- Use our TDS Calculator to get the right rate.
- If the money is going to the seller's bank account abroad, the bank will ask for Form 145 (earlier 15CA), and sometimes Form 146 (earlier 15CB) from a CA.
After you pay
- Pay the TDS and file Form 141 within 30 days after the end of the month you deducted it. For example, if you deduct on 15 October, file by 30 November.
- Download Form 132 and give it to the seller within 15 days of that date.
In short
From 1 October 2026, you can buy property from an NRI without a TAN. File Form 141 on your PAN and give the seller Form 132. But the TDS is still high: 12.5% or 30% plus surcharge and cess, on the full price, with no ₹50 lakh limit. Get the rate right first.
Work out your TDS and Form 141 due date with the TDS Calculator.
Sources
- Notification No. 121/2026, Income-tax (Fifth Amendment) Rules, 2026 — incometax.gov.in
- CBDT Amends TDS Rules for Non-Resident Immovable Property Transfers — TaxGuru
- CBDT simplifies TDS compliance for property purchases from non-residents — Business Today
- Buying Property from an NRI: Form 144 and Form 145/146 Explained — CA Alok Kumar