The Union Budget 2026-27 has proposed a key compliance relief for individuals buying property from non-residents. While presenting the Budget for 2026-2027, Sitharaman said that buyers will no longer be required to obtain a Tax Deduction and Collection Account Number (TAN) to deduct tax at source on such transactions.
Under the proposed framework, resident individuals or Hindu Undivided Families (HUFs) purchasing immovable property from non-residents can report Tax Deducted at Source (TDS) by quoting their Permanent Account Number (PAN), similar to transactions between two residents. The change will come into effect from October 1.
Presenting the Budget, Finance Minister Nirmala Sitharaman said, “TDS on the sale of immovable property by a non-resident is proposed to be deducted and deposited through the resident buyer's PAN-based challan instead of requiring TAN.”
Currently, TAN is mandatory when a buyer purchases property from a non-resident seller, even for a one-time transaction. This has been seen as a compliance burden, as buyers need to apply for TAN, deposit taxes and file quarterly TDS returns.
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According to the Budget memorandum, the government has proposed amending Section 397(1)(c) of the Income Tax Act to remove the TAN requirement for resident individuals or HUFs deducting tax on property purchases from non-residents. The deduction will instead be reported using PAN, as is done in similar transactions involving resident sellers.
The memorandum stated that while buyers of property from resident sellers are not required to obtain a TAN, the rule differed when the seller was a non-resident, leading to unnecessary compliance for a single transaction.
Tax experts have welcomed the move. “By eliminating the need for TAN while buying property from NRIs, the Budget has addressed a long-standing compliance burden faced by individual home buyers. This is a welcome step towards simplifying TDS procedures and improving ease of compliance,” Divya Baweja, Partner, Deloitte India, said, PTI reported.
The amendment will take effect from October 1, 2026.
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Presenting the Budget, Finance Minister Nirmala Sitharaman said, “TDS on the sale of immovable property by a non-resident is proposed to be deducted and deposited through the resident buyer's PAN-based challan instead of requiring TAN.”
Currently, TAN is mandatory when a buyer purchases property from a non-resident seller, even for a one-time transaction. This has been seen as a compliance burden, as buyers need to apply for TAN, deposit taxes and file quarterly TDS returns.
(Join our ETNRI WhatsApp channel for all the latest updates)
According to the Budget memorandum, the government has proposed amending Section 397(1)(c) of the Income Tax Act to remove the TAN requirement for resident individuals or HUFs deducting tax on property purchases from non-residents. The deduction will instead be reported using PAN, as is done in similar transactions involving resident sellers.
The memorandum stated that while buyers of property from resident sellers are not required to obtain a TAN, the rule differed when the seller was a non-resident, leading to unnecessary compliance for a single transaction.
Tax experts have welcomed the move. “By eliminating the need for TAN while buying property from NRIs, the Budget has addressed a long-standing compliance burden faced by individual home buyers. This is a welcome step towards simplifying TDS procedures and improving ease of compliance,” Divya Baweja, Partner, Deloitte India, said, PTI reported.
The amendment will take effect from October 1, 2026.