NRI Property Sale Before October 1, 2026: Why Buyers Need TAN And What Changes After October 1

The sale of property in India has undergone a change, especially for non-resident Indians (NRIs). Now, NRIs planning to sell property in India need to pay closer attention to tax requirements. A major change has been introduced in the Income-tax Act, 2025. The changes remove the requirement to obtain a Tax Deduction and Collection Account Number (TAN). This change, however, will only take effect from October 1, 2026. Until then, the existing compliance process will be applicable.

For any NRI selling immovable property in India, the buyer is responsible for deducting tax at source (TDS) from the sale consideration. Unlike transactions involving resident sellers, where TDS is applicable only after the prescribed threshold, there is no minimum sale-value threshold for TDS when the seller is an NRI.

The rate of tax deducted at source (TDS) also depends on whether the seller makes a long-term or short-term capital gain (STCG). Long-term capital gains (LTCG) on transactions attract TDS at 12.50 per cent, along with the applicable surcharge and cess. For STCG, tax is deducted at the slab rate of the NRI, which is subject to surcharge and cess.

Why TAN is Important

For transactions related to property completed before October 1, 2026, the buyer must obtain a TAN and comply with the relevant TDS filing requirements. TAN is a 10-digit alphanumeric code which is issued by the Income Tax Department to people responsible for deducting or collecting tax at source.

The important thing to note for buyers is that this comes into effect from October 1, 2026. Under the amended provisions, a resident individual or Hindu Undivided Family (HUF) purchasing immovable property from an NRI will be able to deposit the applicable TDS using their Permanent Account Number (PAN) instead of a separate TAN.

Says Raghunath Reddy Bhattagiri, co-founder and MD, Triguna Projects: “The ease in the TDS procedure would help both NRIs and Indians to conduct their business in a much simpler manner. This is particularly good news for NRIs who plan to conduct transactions of buying or selling properties in India, as an easier compliance system may simplify the process and help avoid any delays in transactions.”

The key takeaway is simple: the TAN requirement hasn’t disappeared; it has been relaxed from October 1, 2026. Until September 30, 2026, buyers who are purchasing property from NRI owners should follow the existing TAN-based TDS process while also ensuring that the required tax documentation is in order before they approach the property registrar.