# What Changed in 2026 for NRIs Who Own or Sell Property in India

**Three changes reset the rulebook for NRI property in India. Long-term capital gains on property now sit at a flat 12.5% without indexation, the Income-tax Act 2025 replaces the 1961 Act from 1 April 2026 and renames the remittance forms, and from 1 October 2026 a resident individual buying from an NRI no longer needs a TAN.**

If you are an NRI who owns a flat in Pune or plans to sell an inherited house in Chennai, the mechanics of tax and compliance moved under your feet across 2024, 2025, and 2026. This guide reports what changed, the exact date each change took effect, and who it applies to. It is a plain reading of the rules, not legal or tax advice. Confirm your own position with a chartered accountant before you act.

## The three changes at a glance

| What changed | Effective date | Who it affects |
| --- | --- | --- |
| LTCG on land or building taxed at a flat 12.5% without indexation. The 20%-with-indexation option is resident-only. | 23 July 2024 | NRIs and OCIs get the flat 12.5% with no indexation choice |
| Income-tax Act 2025 replaces the Income-tax Act 1961. Sections renumbered. Forms 15CA and 15CB are renamed (reported as Form 145 and Form 146). | 1 April 2026 | Anyone remitting sale proceeds or funds to a non-resident |
| Resident buyers no longer need a TAN to deduct TDS when buying property from an NRI. TDS runs on a PAN-based challan. | 1 October 2026 | Resident individual and HUF buyers purchasing from NRIs |

## Change 1: Long-term capital gains on property is a flat 12.5% without indexation

The Finance (No.2) Act 2024 rewrote how long-term capital gains on immovable property are taxed. For any land or building sold on or after 23 July 2024, the rate is 12.5% without indexation. The earlier structure of 20% with the indexation benefit is gone for this new flow.

Parliament did leave one relief in place. For property acquired before 23 July 2024, a seller can pay the lower of 12.5% without indexation or 20% with indexation. Read the eligibility line closely. Under the second proviso to section 112(1)(a), that choice sits only with a resident individual or a resident Hindu Undivided Family. The relief does not reach non-residents, firms, companies, or any asset other than land or building.

The result for NRIs is direct. An NRI selling property in India pays 12.5% on the long-term gain without indexation, and the option to compute tax the old way at 20% with indexation is not available. Indexation, which used to lift the cost base for inflation and shrink the taxable gain, no longer figures in an NRI computation on property. For a long-held asset bought decades ago, losing indexation can raise the taxable gain even though the headline rate fell from 20% to 12.5%. Run both the gain and the tax before you assume the lower rate helps you.

This rate flows straight into the tax deducted at source on your sale. See [how TDS on the sale of property by an NRI works](/guides/tds-on-sale-of-property-by-nri) and our [guide to capital gains tax on NRI property](/guides/capital-gains-tax-nri-property) for the full computation and the lower-deduction certificate route that stops the buyer from over-deducting.

## Change 2: The Income-tax Act 2025 takes over from 1 April 2026

The Income-tax Act 2025 replaces the Income-tax Act 1961 with effect from 1 April 2026. This is the first full rewrite of India's income-tax statute in more than sixty years. The stated aim was a shorter, plainer law, not a change in tax policy. For most NRIs the tax you owe on a property sale does not shift because of the new Act. What shifts is the plumbing: section numbers, form numbers, and the language you will see on notices and certificates.

Two moving parts matter for NRI property.

**Section renumbering.** Familiar provisions now carry new numbers. The TDS obligation on payments to a non-resident, long known as section 195, sits in the section 393 area of the new Act. The provision that governs the remittance certificate, old section 195(6), moves to section 397. If your paperwork or your CA still cites 1961-Act sections after April 2026, that is a labelling gap, not a different rule. The substance carries over.

**Forms 15CA and 15CB are renamed.** Before you repatriate sale proceeds, your bank needs the remittance forms. Under the new Act these keep the same job under new numbers, reported as Form 145 (the remitter's declaration) and Form 146 (the chartered accountant's certificate on the nature of the remittance and the tax withheld). The change applies to remittances made on or after 1 April 2026. Forms 15CA and 15CB filed for remittances up to 31 March 2026 stay valid.

Our [Form 15CA and 15CB guide](/guides/form-15ca-15cb-guide) walks through who files which form, when a CA certificate is mandatory, and how the two forms clear your money out of India.

## Change 3: Buyers no longer need a TAN to deduct TDS on a purchase from an NRI

This is the change that removes real friction from a cross-border sale. Until now, a resident buying property from an NRI had to obtain a Tax Deduction and Collection Account Number, a TAN, before deducting TDS on the payment. A resident buying from another resident never needed one. That gap discouraged some buyers from dealing with NRI sellers at all, because the TAN and the quarterly TDS return that follows it are a compliance chore.

From 1 October 2026 that requirement goes for the common case. A resident individual or a Hindu Undivided Family buying immovable property from a non-resident can deduct and deposit the TDS on a PAN-based challan-cum-statement, the same style of process residents already use with Form 26QB. No TAN, no separate quarterly return.

The relief comes in under the Income-tax Act 2025 and takes effect on 1 October 2026. Read the boundary carefully. The exemption covers resident individuals and HUFs. A buyer that is a company or a firm still needs a TAN. And this is procedural relief only. The buyer's duty to deduct the correct TDS on the sale, at the rate that flows from the seller's gain, does not change. Deduct wrong or deposit late and the buyer still carries the exposure.

For NRI sellers the practical effect is a wider pool of willing buyers and a cleaner closing, because the buyer no longer has to register for a TAN before the deal can complete.

## What did not change

Keep three things in view so you do not over-read the headlines.

- **TDS still applies at source on your sale.** The buyer still deducts before paying you. The rate still tracks whether the gain is long-term or short-term and whether you hold a lower-deduction certificate.

- **Repatriation limits and routes are unchanged by these three items.** The USD 1 million per financial year route from an NRO account and the documentation your bank asks for continue as before.

- **The tax you owe is set by your gain, not by the form number.** Renamed forms and renumbered sections do not raise or lower your bill. The 12.5% rate does the work on the tax side.

If you are mid-way through a sale, the full walk-through in our [NRI selling property in India guide](/guides/nri-selling-property-in-india-guide) sequences the steps in the order they actually happen.

## A note on scope

This guide reports the rules as they stand for the dates shown. It is not legal advice or tax advice, and it is not a substitute for a chartered accountant who has seen your documents. Tax outcomes on an NRI property sale turn on the holding period, the acquisition date and cost, the availability of a lower-deduction certificate, and any relief under a Double Taxation Avoidance Agreement. Have a CA confirm the numbers before you sign or remit.

## FAQ

**Do NRIs get the choice between 12.5% without indexation and 20% with indexation?**
No. For property acquired before 23 July 2024, the lower-of-two choice sits only with resident individuals and resident HUFs under the second proviso to section 112. NRIs and OCIs pay a flat 12.5% on the long-term gain with no indexation option on the sale.

**Does the lower 12.5% rate mean my tax bill falls?**
Not always. The rate dropped from 20% to 12.5%, but indexation no longer lifts your cost base. For an asset held many years, the loss of indexation can raise the taxable gain enough to offset the lower rate. Compute the gain both ways before you assume you save.

**What replaces Form 15CA and Form 15CB in 2026?**
Under the Income-tax Act 2025, Form 15CA and Form 15CB are renamed (reported as Form 145 and Form 146) for remittances made on or after 1 April 2026. Form 145 is the remitter's declaration. Form 146 is the chartered accountant's certificate. Forms filed for earlier remittances stay valid.

**From when does a buyer stop needing a TAN to buy from an NRI?**
From 1 October 2026, a resident individual or HUF buying immovable property from a non-resident can deduct and deposit TDS on a PAN-based challan without a TAN. The relief comes in under the Income-tax Act 2025. Company and firm buyers still need a TAN.

**Does the Income-tax Act 2025 change how much tax I owe on a sale?**
For most NRI property sales, no. The new Act is a rewrite for structure and language, not a change in the tax rate on your gain. What changes is the section numbers and form numbers you will see. The tax itself is still set by your capital gain.

**Do I still have to deduct or pay TDS after these changes?**
Yes. TDS at source on an NRI property sale continues. The buyer still deducts before paying, and the seller can still apply for a lower-deduction certificate to avoid over-deduction. The 2026 changes ease the paperwork around TDS. They do not remove the obligation.

## Compare and cost

- [The NRI Property Management Companies in India: A Comparison You Can Check](/guides/best-nri-property-management-companies-india)
- [What NRI Property Management Costs in India: The Four Models and What Hides in Each](/guides/nri-property-management-cost-india)
- [NoBroker NRI Services Review: What the Pages Promise and What They Leave Out](/guides/nobroker-nri-services-review)

---

Source: [https://66mgroad.com/guides/nri-property-rules-2026-changes](https://66mgroad.com/guides/nri-property-rules-2026-changes) · 66 MG Road. Full LLM brief: https://66mgroad.com/llms.txt