By Saurabh Garg, founder·9 min read·Published 2026-09-20

Short answer: Section 87 of the Finance Act, 2026 removes the duty on a resident individual or HUF to apply for a TAN when deducting tax on the purchase of immovable property from a non-resident, with effect from 1 October 2026. The Income-tax Rules, 2026 have not been amended to match. The PAN based challan-cum-statement, Form 141, is confined by rule 218(3) to deductions under section 393(1), which covers payments to residents. A deduction from a non-resident still reports on Form 144 under rule 219(1), a quarterly statement whose Part A asks for the deductor's Tax Deduction and Collection Account Number. CBDT's own amendment note of 17 September 2026 records the Rules as last amended on 24 July 2026.

The Buyer's TAN Exemption Starts on 1 October. The Form to Use Instead Is Not Notified.

Section 87 of the Finance Act, 2026 frees a resident individual or Hindu undivided family from having to apply for a TAN when they deduct tax on the purchase of immovable property from a non-resident. It takes effect on 1 October 2026. The Income-tax Rules, 2026 have not been changed to match. The one PAN based challan the rules provide is closed to deductions from a non-resident, and the only statement prescribed for such a deduction asks for a TAN. If you are an NRI selling a flat that closes in October, this is the part of the paperwork your buyer will ask you about.

Who this is for

The owner abroad selling Indian property to a resident individual or to a Hindu undivided family, in a sale that completes on or after 1 October 2026. It also matters if you are choosing between closing in September and closing in October.

What the Finance Act says

The Finance Act, 2026 is Act No. 4 of 2026. It received the President's assent on 30 March 2026 and was published the same day in the Gazette of India Extraordinary, Part II, Section 1, No. 9.

Section 87 reads:

In section 397 of the Income-tax Act, in sub-section (1), for clause (c), the following clause shall be substituted with effect from the 1st October, 2026, namely:—

The substituted clause has four limbs. The third is the new one:

(iii) 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]; or

Read that against what clause (a) of section 397(1) requires, in the Income-tax Act, 2025:

Every person deducting or collecting tax shall apply for allotment of a tax deduction and collection account number to the Assessing Officer within such time as may be prescribed, if that person has not already been allotted such number;

So the exemption is from applying for a TAN. That is its whole scope. Clause (b) of the same sub-section is untouched:

where a tax deduction and collection account number has been allotted to a person, such person shall quote such number in all challans, statements, certificates referred to in this Chapter, and in all documents pertaining to such transactions as may be prescribed in the interests of revenue;

A buyer who already holds a TAN therefore still quotes it.

Which buyers are covered, and which are not

The clause names a resident individual and a Hindu undivided family. Nobody else. A company, a firm, an LLP or a trust buying an NRI's flat is outside it and continues to apply for a TAN. A non-resident buyer is outside it too.

Section 393(2) is the successor to the old section 195. Its Table is headed "FOR PAYMENTS TO NON-RESIDENT", and entry 17, the one the new clause points at, reads:

Any interest (not being interest referred to against serial numbers 2, 3, 4 and 5) or any other sum chargeable under the provisions of this Act, not being income chargeable under the head "Salaries".

There is no property specific row in that Table. Sale proceeds paid to a non-resident seller are caught as "any other sum chargeable", which is why the exemption points at entry 17 rather than at a row about immovable property.

The gap

A TAN is not a licence. It is the number the tax system uses to accept a payment and match it to a statement. Remove the duty to get one and you still need a route to pay and report. The Income-tax Rules, 2026, notified as G.S.R. 198(E) on 20 March 2026, provide two such routes and neither is open here.

The first is the challan-cum-statement. Rule 218(3) opens:

Irrespective of anything contained in sub-rules (1) and (2), where any sum is deducted under section 393(1) in respect of following nature of income or sum,—

It then lists rent, consideration for transfer of immovable property other than agricultural land, contract and professional and commission payments, and virtual digital assets, and closes:

the payment of such sum to the credit of the Central Government, shall be made within a period of thirty days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 141.

Form 141 is the consolidated successor to the old Forms 26QB, 26QC, 26QD and 26QE. Its own heading fixes its reach:

FORM NO. 141 [See rules 218(3) and 219(5)] Challan-cum-statement of deduction of tax under section 393(1) [Table Sl. No. 2(i), 3(i), 6(ii) and 8(vi)]

Every reference is to section 393(1), and section 393(1) applies where a sum is paid "to a resident". Its Table is headed "FOR PAYMENTS TO RESIDENT". A deduction from a non-resident seller is made under section 393(2), which appears nowhere in rule 218(3) or in Form 141.

The second route is the quarterly statement under section 397(3)(b). Rule 219(1) sets out which form goes with which section. Entry 2 of its Table reads:

Sections 392(7), 393(2) and 393(3), in respect of the deductee who is a non-resident, not being a company or a foreign company or a resident but not ordinarily resident. | 144.

Form 144 is the quarterly statement for payments other than salary made to non-residents. Part A of that form lists the particulars of the deductor. Row 4 is the Permanent Account Number. Row 5 is:

Tax Deduction and Collection Account Number

So the only statement the rules prescribe for a deduction from a non-resident seller carries a field for the number the buyer has been excused from obtaining.

Nothing has been notified since

The most recent amendment to the Income-tax Rules, 2026 is Notification No. 120/2026, G.S.R. 822(E), dated 17 September 2026, the Income-tax (Fourth Amendment) Rules, 2026. It changes rules 160, 176, 225, 246 and 256 and substitutes Forms 169 and 171. It touches rule 218, rule 219, Form 141 and Form 144 in no way at all. Its closing note records the chain:

The Income-tax Rules, 2026 were published in the Gazette of India, Extraordinary, Part II, section 3, sub-section(i) vide notification number G.S.R. 198(E), dated the 20th March, 2026 and was last amended vide notification G.S.R. 656(E), dated the 24th July, 2026.

That is the Board's own statement that between 24 July 2026 and 17 September 2026 the Rules were not amended. The Board's notification list carries nothing dated after 17 September 2026.

What this changes for you

Nothing about the tax. The buyer still deducts on the full sale consideration rather than on your gain, and the route to cut what is withheld is still the lower or nil deduction certificate you apply for before the sale. We set out the buyer's duty in the buyer's TDS guide and the seller's side in TDS on sale of property by an NRI, and the certificate itself in the lower TDS certificate guide.

What changes is a question your buyer may raise between now and the closing. A resident individual buyer reading the Finance Act will see that they need not apply for a TAN from 1 October 2026. A buyer reading the Rules will see Form 144 and its TAN field. Both are reading the documents right. The Rules have not caught up with the Act, and we report that rather than telling you which way it resolves. Our June piece on this change, no TAN needed from 1 October 2026, has been corrected today to match the enacted text.

If the Board notifies a form or a rule before 1 October 2026, we will update this page and date the update.

FAQ

Does a resident buyer need a TAN to buy property from an NRI after 1 October 2026? Section 87 of the Finance Act, 2026 removes the duty on a resident individual or Hindu undivided family to apply for one, with effect from 1 October 2026. A buyer who already holds a TAN still quotes it under section 397(1)(b). Companies, firms and LLPs are not covered by the exemption.

Can the buyer use Form 141 instead? Form 141 is headed as a challan-cum-statement for deductions under section 393(1), which covers payments to residents. A deduction from a non-resident seller is made under section 393(2). Rule 218(3) does not extend to it.

Which form reports a deduction from an NRI seller? Form 144, the quarterly statement for payments other than salary made to non-residents, under rule 219(1) Table entry 2. Part A of the form asks for the deductor's Tax Deduction and Collection Account Number.

Has the CBDT notified a PAN based form for this? Not as at 20 September 2026. The Rules were last amended by G.S.R. 656(E) of 24 July 2026 on the Board's own note in its 17 September 2026 notification, and neither that notification nor any other since has touched rule 218, rule 219, Form 141 or Form 144.

Should I close my sale before 1 October 2026 or after? That is a question for the person handling your tax, and it turns on your own numbers rather than on this rule. What we can say is what the documents say, which is set out above.

Selling from abroad and want this handled?

66 MG Road coordinates the sale paperwork for NRI owners through vetted CA partners: the lower deduction certificate, the buyer side compliance and the repatriation that follows, with itemized billing and proof at every step. We run property with our own teams in Delhi NCR and Bangalore. A Property Health Check or Watch covers the rest of India through vetted local partners. See TDS and lower-deduction certificates or request a proposal.

66 MG Road newsdesk

Sources

Information on this page is as on 2026-09-20. Rules, rates, deadlines and government portals change without notice, so verify against the official source before you act. This page is for information only. It is not tax or legal advice, and it is not a substitute for a qualified adviser who knows your position.