Buyers purchasing property from non-resident Indians must obtain a TAN and complete TDS formalities until the new PAN-based system takes effect
Non-resident Indians (NRIs) selling property in India face an important tax compliance requirement until September 30, 2026. Buyers purchasing property from an NRI must obtain a Tax Deduction and Collection Account Number (TAN) to deduct and deposit tax at source (TDS). The requirement will be removed from October 1, 2026, following changes introduced in the Finance Act, 2026.
Unlike property sales by resident Indians, there is currently no minimum transaction threshold for TDS when the seller is an NRI. The applicable rate also depends on whether the gains are classified as long-term or short-term. For long-term capital gains, TDS is generally 12.5%, along with applicable surcharge and cess, while short-term gains are subject to the NRI’s applicable tax slab, plus surcharge and cess.
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The buyer must also ensure that the TDS is properly deposited and documented
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Property registration authorities in several states may require proof of TDS payment, such as a TDS challan or certificate, before registering the transaction
For transactions completed before October 1, buyers must obtain a TAN and follow the prescribed filing process. TDS can be paid online through the Income Tax Department’s e-Pay Tax facility, with the challan generated during the payment process. The tax must generally be deposited within seven days from the end of the month in which it was deducted.
From October 1, 2026, resident individuals and Hindu Undivided Families buying property from NRIs will no longer need a separate TAN. Instead, they can deduct TDS using their PAN and report the transaction through the prescribed challan-cum-statement process. The government says the change is intended to reduce compliance requirements and bring NRI property transactions closer to the procedure already followed for resident sellers.
