By Saurabh Garg, founder·6 min read·Published 2026-06-18·Updated 2026-09-20

Short answer: From 1 October 2026 a resident individual or Hindu undivided family buying immovable property from a non-resident is not required to apply for a TAN. That is section 87 of the Finance Act, 2026, which substitutes clause (c) of section 397(1) of the Income-tax Act, 2025. The exemption is from applying for the number. The Income-tax Rules, 2026 have not been amended to provide a PAN based way to pay and report, and as at 20 September 2026 the only statement prescribed for a deduction from a non-resident is Form 144, which asks for the deductor's TAN.

Buying From an NRI Gets Simpler: No TAN Needed From 1 October 2026

Corrected on 20 September 2026. This piece was written from the Finance Bill stage and said the buyer would "deposit the TDS using their PAN instead of a TAN" and that "the reporting moves to a PAN-based mechanism". The enacted text does not say that. Section 87 of the Finance Act, 2026 removes the duty to apply for a TAN and nothing more, and the Income-tax Rules, 2026 have not been amended to provide a PAN based route. The claim has been replaced with what the gazette says. The full position, with the primary sources, is in the buyer's TAN exemption and the form that is not notified.

One of the reasons resident buyers walk away from an NRI seller gets smaller on 1 October 2026. From that date a resident individual or Hindu undivided family buying immovable property from a non-resident is not required to apply for a TAN.

When the seller is an NRI the buyer deducts tax under the non-resident provisions, and until now had to obtain a TAN, the Tax Deduction and Collection Account Number, and file quarterly statements. Many resident buyers did not want that, so they discounted or walked. The Finance Act, 2026 changes one half of it.

What changed

The Finance Act, 2026 is Act No. 4 of 2026, assented on 30 March 2026. Section 87 substitutes clause (c) of section 397(1) of the Income-tax Act, 2025 "with effect from the 1st October, 2026". The new limb reads:

(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

Clause (a) of section 397(1), which that exempts them from, is the duty to "apply for allotment of a tax deduction and collection account number". So the change is to the duty to obtain the number. It says nothing about paying or reporting by PAN. Clause (b), which requires a person who has been allotted a TAN to quote it, is untouched.

The exemption covers a resident individual and a Hindu undivided family. A company, firm, LLP or trust buying an NRI's property is outside it.

What has not changed

The Income-tax Rules, 2026 have not been amended to match. Form 141, the PAN based challan-cum-statement, is confined by rule 218(3) to deductions under section 393(1), which covers payments to residents. A deduction from a non-resident seller is made under section 393(2) and 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. As at 20 September 2026 no replacement has been notified.

The timeline that matters

So a sale closing in August 2026 runs on the old rule. A sale closing in November 2026 runs on a rule whose machinery has not been notified. We track this on the September piece.

What it means if you are an NRI selling

One step comes off the buyer's list. The TAN application deterred ordinary resident buyers and shrank the market to those willing to deal with it. From 1 October 2026 a resident individual or Hindu undivided family buyer does not have to make that application. Buying from you does not become as simple as buying from a resident, because the deduction is still made under the non-resident provisions and still reports on the quarterly Form 144, which asks for a TAN. How a buyer without one files that statement is the open question, and it is the subject of the September piece.

What does not change: the buyer still deducts TDS on the full sale consideration, not on your gain, at 12.5% for long-term gains plus surcharge and cess (an effective maximum near 14.95%). The fix for that remains the lower or nil TDS certificate, which you apply for before the sale. We cover the buyer's full duty in the buyer's TDS guide and the seller's side in TDS on sale of property by an NRI.

FAQ

Does a buyer need a TAN to buy property from an NRI in 2026? Yes, until 30 September 2026. From 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. A buyer who already holds a TAN still quotes it under section 397(1)(b), and companies, firms and LLPs are not covered.

Does this lower the TDS an NRI seller pays? No. It only simplifies the buyer's paperwork. TDS is still deducted on the full sale price at the capital-gains rate plus surcharge and cess. To reduce what is withheld, the NRI seller applies for a lower or nil TDS certificate before the sale.

Is it Form 26QB now for buying from an NRI? No. Under the Income-tax Rules, 2026 the successor to Form 26QB is Form 141, and rule 218(3) confines it to deductions under section 393(1), which covers payments to residents. Buying from an NRI runs through section 393(2) and the quarterly Form 144. See the buyer's TDS guide.

Selling from abroad and want this handled?

66 MG Road coordinates the sale paperwork for NRI owners through vetted CA partners: the lower-TDS 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

Primary sources, read in full on 20 September 2026 when this piece was corrected:

The version published on 18 June 2026 cited trade commentary rather than the gazette, which is how the PAN mechanism claim got in. Those citations have been removed.

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.