CBDT has issued Notification No. 121/2026 dated 22 September 2026, bringing important procedural changes for TDS on purchase of immovable property from a non-resident. The change is particularly relevant for resident Individuals and HUFs purchasing property from an NRI.

The Finance Act, 2026 had already provided that, with effect from 1 October 2026, a resident Individual or HUF would not be required to obtain TAN for deducting tax on consideration paid for transfer of immovable property to a non-resident. The latest CBDT notification now makes the corresponding changes in the Income-tax Rules and, importantly, introduces the reporting mechanism through Form No. 141 with a new Schedule E. (India Budget)

The notification is called the Income-tax (Fifth Amendment) Rules, 2026 and comes into force from 1 October 2026.

What is the change from 1 October 2026?

Suppose a resident individual purchases a house in India from an NRI.

Under the earlier provisions, TDS was required to be deducted because the payment was being made to a non-resident. However, unlike the purchase of property from a resident seller, the buyer could not simply use the PAN route. The buyer was required to obtain a TAN because the transaction fell under the provisions corresponding to Section 195.

The Finance Act, 2026 specifically addressed this compliance burden.

The Memorandum explaining the Finance Bill stated that where a resident Individual or HUF purchases immovable property from a non-resident, obtaining TAN merely for a single property transaction creates an unnecessary compliance burden. Therefore, Section 397 was amended to remove the TAN requirement for such buyers with effect from 1 October 2026. (India Budget)

The amended Section 397(1)(c) now specifically covers:

a resident individual or Hindu undivided family in respect of a transaction where he is required to deduct tax on any consideration for the transfer of any immovable property under section 393(2) [Table: Sl. No. 17].

The Finance Act amendment is effective from 1 October 2026. (Income Tax India)

But there is a very important point:

TAN requirement has been removed — TDS requirement has NOT been removed.

This distinction is extremely important.

From 1 October 2026, the resident Individual/HUF can deduct the applicable TDS without obtaining TAN, but the buyer will still have to comply with the TDS provisions applicable to payment to the non-resident.

Why was this change required?

There was an obvious compliance difference between two similar transactions.

Property purchased from a Resident

Where an Individual/HUF purchases an immovable property from a resident seller and TDS provisions apply, the buyer has historically been allowed to comply without obtaining TAN.

Property purchased from a Non-Resident

Where the seller was a non-resident, the transaction was governed by the non-resident TDS provisions, corresponding to old Section 195 and now Section 393(2) of the Income-tax Act, 2025.

Consequently, a resident Individual purchasing even one property from an NRI could face the additional compliance of obtaining TAN.

The Budget 2026 proposal sought to bring these two situations closer from the perspective of TAN compliance.

The official Budget Memorandum specifically describes the amendment as a relaxation from the requirement to obtain TAN by a resident Individual or HUF where the seller of the immovable property is a non-resident. (India Budget)

Section 393(2) — What provision applies to purchase from an NRI?

With the Income-tax Act, 2025, the TDS provisions were reorganised into a tabular structure.

For payments to non-residents, Section 393(2), Table Serial No. 17 covers:

“Any interest … or any other sum chargeable under the provisions of this Act, not being income chargeable under the head ‘Salaries’.”

The Income-tax Department explains that Section 393 is the consolidated TDS provision under the new Income-tax Act and that Section 393(2) deals with payments to non-residents. (Income Tax Department)

Therefore, where a resident Individual/HUF purchases an immovable property from a non-resident, the TDS obligation falls under:

Section 393(2) → Table Sl. No. 17

and not under the ordinary resident-property provision under Section 393(1).

What exactly has CBDT notified on 22 September 2026?

This is where Notification No. 121/2026 dated 22 September 2026 becomes very important.

The notification amends Rules 215, 218 and 219 and also modifies Forms 132 and 141. The rules are effective from 1 October 2026.

The changes can be understood in four parts:

No TAN for eligible Individual/HUF
TDS payment mechanism
TDS reporting through Form 141
TDS certificate through Form 132

Let’s understand each one.

1. No TAN required from 1 October 2026

The primary relief is under Section 397.

A resident Individual or HUF deducting TDS on consideration for transfer of immovable property from a non-resident will not be required to obtain TAN.

The Finance Act amendment specifically inserted this category into Section 397(1)(c). (Income Tax India)

Therefore:

Particular	Up to 30 September 2026	From 1 October 2026
Buyer	Resident Individual/HUF	Resident Individual/HUF
Seller	Non-resident	Non-resident
TDS	Applicable	Applicable
Section	393(2), Table 17	393(2), Table 17
TAN	Required	Not required
Special reporting	Existing non-resident TDS mechanism	Form 141 – Schedule E
TDS Certificate	Existing mechanism	Form 132

So the major change is not “No TDS”.

The correct statement is:

“From 1 October 2026, Resident Individual/HUF does not require TAN for TDS on purchase of immovable property from a Non-Resident.”

2. Form 141 has now been specifically expanded

This is one of the most important changes introduced by the 22 September 2026 notification.

The notification modifies Form No. 141.

Earlier, Form 141 was associated with certain TDS transactions under Section 393(1). Now the heading of Form 141 has been expanded to also cover:

Section 393(2) [Table Sl. No. 17].

The notification specifically inserts Section 393(2) into the heading of Form 141.

More importantly, a completely new:

Schedule E — TDS on any consideration on transfer of any immovable property covered under Section 393(2) [Table Sl. No. 17]

has been inserted into Form 141.

This is the procedural mechanism that was needed after removing the TAN requirement.

What information will have to be reported in Schedule E?

The new Schedule E is quite detailed.

It requires information relating to the property, buyer, non-resident seller and TDS transaction.

1. Property details

The form requires:

Address of the property
Type of immovable property

The property type can be selected as:

Land other than agricultural land
Building or part of a building
Both

These fields are specifically incorporated in the new Schedule E.

2. Details of all buyers

The Schedule E requires details of all buyers.

The form captures:

Serial number
PAN of buyer
Name of buyer
Proportion of total sale consideration to be paid/credited by each buyer

The proportions have to total 100%.

This is important in joint-purchase cases.

For example, if husband and wife are purchasing a property:

Husband – 50%
Wife – 50%

the form is structured to capture the individual PAN and proportion of consideration for each buyer.

3. Details of all sellers/deductees

Because this is a transaction involving a non-resident seller, the new Schedule E asks for substantially more information about the seller.

The form contains fields for:

PAN, if available
Name
Status
Contact number
Email ID
Address in the country/territory outside India where the deductee is resident
Tax Residency Certificate number
Tax Identification Number
Proportion of total sale consideration received/debited by each seller

This is a major difference from a normal resident-property TDS transaction.

PAN of NRI seller is not the only information required

A particularly important clarification is contained in Note 6 of the amended Form.

The notification states that the:

Contact Number, Email ID and foreign address of the non-resident deductee are mandatorily required whether PAN of the non-resident is available or not.

Further, if PAN of the non-resident is not available, specified details relating to the seller’s Tax Residency Certificate and Tax Identification Number are required in accordance with Rule 217 so that tax is not deducted at the higher rate.

Therefore, buyers should not assume that:

“Seller doesn’t have PAN, so I will simply deduct TDS at a higher rate.”

The new Schedule E has specifically been designed to capture information relating to the non-resident seller.

4. Date of agreement and registration

Schedule E also asks for:

Date of agreement
Date of registration, if available

This will help establish the timeline of the transaction.

5. Stamp duty value and sale consideration

The form specifically asks for:

Total Stamp Duty Value of the property

and

Total Sale Consideration in respect of the property.

This information is important because the taxability and TDS calculation in a non-resident property transaction can require examination of the applicable provisions rather than simply applying the resident-property 1% mechanism.

6. Instalment payments are specifically covered

The new Schedule E also recognises that property transactions may not be paid in one lump sum.

The buyer has to indicate whether the payment is:

Lump sum, or
Instalments

If it is an instalment transaction, the form asks whether it is:

First instalment
Subsequent instalment
Last instalment

For subsequent or last instalments, the previous acknowledgement number is also required.

In the case of the final instalment, the form asks for the total consideration paid/credited including the current instalment.

This is a very useful practical change because NRI property transactions frequently involve multiple payments.

7. Capital gains details of the NRI seller

The new Schedule E goes beyond merely collecting payment information.

It specifically asks for transaction details concerning the seller, including:

PAN of deductee/seller
Name of seller
Whether the seller is opting out of the applicable taxation regime under Section 202(1), where applicable
Type of capital gains in the hands of the seller

The form provides options for:

Long-term capital gains
Short-term capital gains, excluding specified gains

This is significant because TDS on a payment to an NRI is linked to the amount chargeable to tax and the applicable rate, rather than simply treating every NRI property transaction like the resident-seller 1% TDS mechanism.

8. Details of TDS calculation

Schedule E also contains fields for:

Proportionate stamp duty value
Amount paid/credited in previous instalments
Amount paid/credited in present transaction
Date of credit/payment
Amount on which tax is liable to be deducted
Rate at which tax is deducted
Certificate number under Section 395(1), if obtained by deductee
Certificate number under Section 395(2), if obtained by deductor
Amount of TDS
Date of deduction

This clearly demonstrates that the new Form 141 is intended to provide a complete transaction-level reporting mechanism.

What if the NRI obtains a lower/nil deduction certificate?

This is another important aspect.

The new Schedule E specifically provides a field for the certificate number under Section 395(1) where the deductee has obtained such a certificate, and a field for the certificate under Section 395(2) where obtained by the deductor.

Therefore, the new TAN relaxation does not eliminate the possibility of applying the lower/nil deduction mechanism.

The applicable TDS has to be determined based on the provisions applicable to the non-resident seller and the amount chargeable to tax.

What is the due date for payment and Form 141?

The CBDT notification also amended Rule 218(3).

It specifically inserts consideration for transfer of immovable property covered by Section 393(2), Table Sl. No. 17, where the consideration is paid or credited by a resident Individual or HUF.

The corresponding amendment in Rule 219(5) also specifically includes Section 393(2), Table Sl. No. 17.

Thus, the new Form 141 mechanism is not merely a form-design change. The Rules have been amended to incorporate this category into the relevant payment and reporting provisions.

Form 132 will also cover this transaction

The CBDT has also amended Rule 215(1).

The revised provision includes deduction under:

Section 393(2), Table Sl. No. 17

where a resident Individual or HUF deducts tax on consideration for transfer of immovable property.

Correspondingly, Form No. 132 has been amended.

The form now specifically includes:

Transfer of immovable property by a non-resident to a resident individual or Hindu undivided family.

Therefore, the compliance chain from 1 October 2026 becomes much clearer:

TDS deduction → payment/reporting through Form 141 → TDS certificate through Form 132

without requiring the resident Individual/HUF to obtain TAN.

What about the TDS rate?

This is an area where buyers need to be particularly careful.

This transaction should not be confused with the resident-seller property transaction under Section 393(1), Table Sl. No. 3(i), where the familiar 1% mechanism applies subject to the specified conditions.

For purchase from a non-resident, the applicable provision is:

Section 393(2) – Table Sl. No. 17

which covers sums chargeable to tax paid to a non-resident. The Income-tax Department describes Section 393(2) as the provision for deduction on payments to non-residents. (Income Tax Department)

Therefore, the buyer should not simply say:

“Property purchase = 1% TDS.”

That 1% provision relates to the specified resident-property transaction under Section 393(1). A purchase from an NRI falls under the non-resident provisions, and the tax deduction has to be determined considering the amount chargeable to tax, applicable rate provisions, treaty provisions where relevant, and any lower/nil deduction certificate.

What happens if the property is purchased jointly?

The new Schedule E is particularly relevant here.

Suppose:

Mr. A – Resident Individual – 50%
Mrs. A – Resident Individual – 50%

purchase a property from an NRI.

Schedule E specifically asks for the details of all buyers, including their PAN, name and proportion of total consideration.

Similarly, where there are multiple sellers, the form captures details of all deductees/sellers and their proportion of consideration.

The notification also clarifies that where there is more than one deductor, each deductor has to file a separate form.

This will be an important practical point in joint purchases.

What happens if the NRI seller does not have PAN?

The new notification specifically addresses this situation.

The seller’s:

Contact number
Email ID
Foreign address

must be furnished whether PAN is available or not.

Where PAN is unavailable, specified information relating to the seller’s tax residency and identification in the country of residence has to be furnished as prescribed, so that the higher-rate provisions can be appropriately considered.

Therefore, buyers should collect the NRI seller’s overseas tax documentation before completing the transaction, rather than waiting until the TDS filing stage.

Old system vs New system

Purchase of property from NRI by Resident Individual/HUF

Particular	Till 30 Sept 2026	From 1 Oct 2026
Buyer	Resident Individual/HUF	Resident Individual/HUF
Seller	Non-resident	Non-resident
TDS provision	Section 393(2), Table 17	Section 393(2), Table 17
TDS applicability	Yes, subject to chargeability	Yes, subject to chargeability
TAN	Required	Not required
Reporting	Non-resident TDS mechanism	Form 141 – Schedule E
TDS Certificate	Applicable	Form 132
Seller details	Required	Detailed information prescribed
Joint buyers	Applicable	Separate buyer-wise details
Instalments	Applicable	Specifically captured in Schedule E
Lower/nil deduction certificate	Available subject to conditions	Available subject to conditions

Why the 22 September notification is important

The Budget announcement in February 2026 was only the beginning of this change.

The Finance Act, 2026 provided the legal amendment to Section 397 from 1 October 2026. The official Budget Memorandum explained that the objective was to remove the unnecessary TAN burden for a resident Individual/HUF purchasing property from a non-resident. (India Budget)

However, once TAN is removed, the government also needs a mechanism through which the transaction can be:

reported,
TDS deposited,
seller identified,
property details captured,
TDS linked with the transaction, and
TDS certificate generated.

That is precisely what the 22 September 2026 CBDT notification now addresses by amending Rules 215, 218 and 219 and modifying Forms 132 and 141.

And the most significant procedural addition is the new Schedule E in Form 141 for Section 393(2), Table Sl. No. 17 transactions.

Effective date — 1 October 2026

The notification clearly states that the Income-tax (Fifth Amendment) Rules, 2026 shall come into force on 1 October 2026.

Therefore, the transaction date becomes extremely important.

If the applicable transaction/payment falls before 1 October 2026

The existing TAN requirement continues to apply.

If the applicable transaction/payment falls on or after 1 October 2026

For a resident Individual/HUF purchasing immovable property from a non-resident, TAN is no longer required, while the prescribed TDS and reporting compliance continues through the newly amended mechanism.

Practical checklist for a buyer purchasing property from an NRI

Before completing the transaction, the resident Individual/HUF should keep the following information/documents ready:

Buyer

PAN
Name
Residential status
Share in property/consideration

NRI Seller

PAN, if available
Name
Foreign address
Contact number
Email ID
Tax Residency Certificate details
Tax Identification Number
Share in sale consideration

Property

Property address
Nature/type of property
Agreement date
Registration date, if available
Stamp duty value
Total sale consideration

TDS

Amount paid in previous instalments
Current payment
Date of payment/credit
Amount liable to TDS
Applicable TDS rate
TDS amount
Lower/nil deduction certificate details, if applicable

The new Schedule E specifically captures these categories of information.

The amendment effective from 1 October 2026 provides significant procedural relief to resident Individuals and HUFs purchasing immovable property from non-residents.

The most important thing to remember is:

TAN removed — TDS not removed.

From 1 October 2026, a resident Individual or HUF will not have to obtain TAN merely because it is deducting TDS on consideration for purchase of immovable property from a non-resident under Section 393(2), Table Sl. No. 17. The Finance Act, 2026 made this change in Section 397. (Income Tax India)

Now, through Notification No. 121/2026 dated 22 September 2026, CBDT has also provided the corresponding procedural framework by amending the Income-tax Rules, 2026 and introducing Schedule E in Form 141 for reporting TDS on such property transactions.

This makes the compliance framework substantially more practical for individuals and HUFs who purchase property from NRIs, particularly where the transaction is a one-time property purchase and obtaining TAN would otherwise have created an additional compliance burden.

Key takeaway:
Property from Resident → Section 393(1), Table 3(i)
Property from Non-Resident → Section 393(2), Table 17
From 1 October 2026 → Resident Individual/HUF buying from NRI → No TAN, but TDS + Form 141 Schedule E + Form 132 compliance continues.

Sources

CBDT Notification No. 121/2026 dated 22 September 2026 — Income-tax (Fifth Amendment) Rules, 2026.
Finance Act, 2026 — amendment to Section 397 effective from 1 October 2026. (Income Tax India)
Budget Memorandum, 2026 — rationale for removing TAN requirement for resident Individual/HUF purchasing immovable property from a non-resident. (India Budget)
Income Tax Department — overview of TDS structure under Section 393 of the Income-tax Act, 2025. (Income Tax Department)