TDS on Property Bought from a Non-Resident: Form 141 and No TAN from 1 October 2026

A resident individual or Hindu undivided family buying immovable property from a non-resident must deduct tax at source under section 393(2) [Table: Sl. No. 17] of the Income-tax Act, 2025. From 1 October 2026, that tax can be deposited and reported through Form No. 141, the PAN-based challan-cum-statement already used for purchases from resident sellers. The CBDT has made the necessary amendments by Notification No. 121/2026 dated 22 September 2026 [G.S.R. 830(E)], which notifies the Income-tax (Fifth Amendment) Rules, 2026. What follows sets out what has changed, who it covers, what the new Schedule E asks for, and what the buyer should collect from the seller before paying.

The notification

The rules are made under section 533 read with sections 395(4)(a) and 397(3)(a) and (b) of the Income-tax Act, 2025, and come into force on 1 October 2026. They amend rules 215, 218 and 219 of the Income-tax Rules, 2026 and Forms No. 132 and 141 in Appendix III.

• Rule 215(1): the Table at serial number 3 now covers deduction under section 393(2) [Table: Sl. No. 17] where a resident individual or HUF deducts tax on consideration for transfer of immovable property. This brings the certificate in Form No. 132 to these transactions.
• Rule 218(3): extended to sums deducted under section 393(2). New clause (e) covers consideration for transfer of immovable property paid or credited by a resident individual or HUF.
• Rule 219(5): new clause (e) brings the same transaction within the challan-cum-statement framework.
• Form No. 141: its heading now includes section 393(2) [Table: Sl. No. 17], Part A gets a new option for transfer of immovable property by a non-resident to a resident individual or HUF, and a new Schedule E is inserted.
• Form No. 132: amended to recognise the same transaction.

Who is covered

The route is limited on the buyer’s side: it applies where the deductor is a resident individual or HUF. On the seller’s side it is wider than “NRI” suggests. The status codes in the notes to Schedule E include a company other than a domestic company, an individual, an HUF, associations of persons, a co-operative society, a firm, a body of individuals and an artificial juridical person. A resident individual buying from a foreign company falls within Schedule E as much as one buying from a non-resident individual.

The property must be land (other than agricultural land), a building or part of a building, or both.

The position until 30 September

Until now, a buyer purchasing from a resident seller could comply without a TAN, but a resident buyer purchasing from a non-resident had to obtain one, even for a single, isolated purchase. Published reports attribute the removal of that requirement, effective 1 October 2026, to a Budget 2026 announcement. Notification No. 121/2026 supplies the reporting route that replaces it.

The 30-day and 15-day timelines are those already applying to Form No. 141 and Form No. 132 under the Income-tax Rules, 2026.

What Schedule E asks for

Schedule E is titled “TDS on any consideration on transfer of any immovable property covered under section 393(2) [Table: Sl. No. 17]”. It is considerably more detailed than a payment challan.

Property: address, type, date of agreement, date of registration (if available), total stamp duty value and total sale consideration.

Buyers: the PAN and name of every buyer, and each buyer’s proportion of the total sale consideration, totalling 100%.

Sellers: for each non-resident seller, PAN (if available), name, status, contact number, email ID, address in the country of residence, tax residency certificate number, tax identification number, and proportion of the consideration receivable.

Payment: whether the consideration is paid in a lump sum or in instalments. For instalments, whether this is the first, a subsequent or the last instalment. For a subsequent or last instalment, the previous acknowledgement number. For the last, the total consideration paid or credited including the present instalment.

Computation, seller by seller:

• whether the seller has opted out of the taxation regime under section 202(1), where applicable
• the type of capital gain: long-term as referred to in section 197(1), or short-term excluding that referred to in section 196
• the proportionate stamp duty value, amounts paid in earlier instalments, the present payment and its date, and the amount on which tax is deductible
• the rate of deduction and the amount deducted, which under Note 10 includes surcharge, where applicable, and cess
• the certificate number under section 395(1) if obtained by the seller, or under section 395(2) if obtained by the buyer
• the date of deduction and, where applicable, the acknowledgement number of the corresponding Form No. 145

What the buyer needs from the seller before paying

Removing the TAN changes the procedure, not the responsibility. The buyer still has to determine the tax correctly, deduct it, and furnish every particular Schedule E requires. Most of those particulars sit with the seller. They are best collected before the agreement is signed, not on the day of payment:

• Overseas contact details. Note 6(a) makes the seller’s contact number, email ID and overseas address mandatory whether or not the seller has a PAN.
• PAN, or TRC and tax identification number. Where the seller has no PAN, Note 6(b) requires the tax residency certificate and tax identification number details under rule 217, “for ensuring that tax is not deducted at higher rate”.
• The nature of the gain. Whether it is long-term or short-term depends on the seller’s holding period, which only the seller can evidence.
• The tax regime choice under section 202(1), where applicable.
• Any certificate under section 395(1) for lower or nil deduction. If one is produced, its number goes into the form.

Joint buyers and instalments

Under Note 11, where there is more than one deductor, each deductor files a separate form. A couple buying jointly from a non-resident therefore files two Schedule E returns, each reporting that buyer’s share. The buyer-wise percentages in each must agree with each other and total 100%.

Instalment purchases are now tracked across their life. Each subsequent instalment quotes the acknowledgement number of the previous one, so the acknowledgements from every filing need to be kept for the whole payment schedule.

What the notification does not settle

The rate of deduction is not prescribed by these rules. Schedule E records the rate applied, and determining it correctly remains the buyer’s responsibility. Nor does the notification contain a transitional provision for agreements where some instalments were paid before 1 October 2026 under the TAN-based route and the rest fall after it. Until that is clarified, how the earlier payments are reported in the Schedule E instalment chain should be settled for each transaction.

Before 1 October

• Payments on or after 1 October 2026. A resident individual or HUF buying from a non-resident can use Form No. 141, Schedule E, without taking a TAN.
• Seller particulars. Contact details, overseas address, PAN or TRC and tax identification number, the nature of the gain, and any section 395(1) certificate should be on file before the first payment.
• Joint buyers. Each files separately, with consistent percentages.
• Instalment purchases. Every acknowledgement number should be kept.
• Deadlines. Form No. 141 is due within 30 days from the end of the month of deduction, and Form No. 132 within 15 days of that due date.

This article is intended for educational purposes only and should not be construed as professional advice. It is based on the law as understood on the date of publication; laws and regulations are subject to change, and it may not reflect later developments. Readers are advised to consult a qualified tax professional on their specific situation before taking any action based on it. CA. Mohit Gaba takes no responsibility for any action taken or decision made on the basis of this article.