NEW DELHI: The process of buying property from a Non-Resident Indian (NRI) is set to become simpler from October 1, 2026, with changes in the TDS compliance process. Under the new rules, resident individuals and Hindu Undivided Families (HUFs) buying immovable property from an NRI will not need to obtain a separate Tax Deduction and Collection Account Number (TAN) for deducting TDS.
Instead, buyers will be able to use their Permanent Account Number (PAN) for deducting, depositing and reporting TDS related to the transaction. Under the existing rules, a resident buyer purchasing property from an NRI is required to deduct TDS and also obtain a separate TAN. For a large transaction such as a property purchase, this adds an additional compliance requirement.
The Income Tax Department has decided to simplify this process under the new rules. Buyers will now be able to submit TDS-related information through a PAN-based challan-cum-statement process. The move is aimed at making tax compliance easier for people purchasing property from NRI sellers.
However, the change does not mean that TDS will no longer apply to property purchases from NRIs. Buyers will still have to deduct TDS as applicable, deposit the amount and report the required information under the relevant rules.
The key change is the removal of the additional requirement to obtain a TAN. The move is expected to reduce paperwork and simplify the compliance process for NRI property transactions. However, buyers will still need to understand the applicable TDS rate, payment procedure and other tax requirements before purchasing property from an NRI.
