Buying From an NRI Seller in Mumbai: No TAN Needed From 1 October 2026
The Income Tax Department says resident individuals and HUFs buying property from a non-resident can report TDS in Form 141 Schedule E using their PAN, with no TAN required from 1 October 2026. The rate must still be entered correctly, and missing seller details can trigger a higher rate.
Until this autumn, a Mumbai family buying a resale flat from a seller who lives abroad had an extra errand before the deal could close: getting a TAN, the tax deduction account number usually associated with businesses and employers. From 1 October 2026, the Income Tax Department says that errand is gone for buyers who are resident individuals or HUFs. Its e-filing help page states that "obtaining a TAN is no longer mandatory for such transactions with effect from 1st October 2026."
The change sits inside Form 141, the new PAN-based challan-cum-statement under the Income-tax Act, 2025. A new Schedule E now lets a resident individual or HUF report tax deducted when buying property from a non-resident, using the buyer's own PAN. For a buyer whose seller lives abroad, this is one of the more practical compliance changes of the year.
The short answer. The Department's Schedule E user manual says Schedule E covers transfers of immovable property by a non-resident to a resident individual or HUF under Section 393(2), and that a TAN is no longer mandatory for these transactions from 1 October 2026. Its Form 141 FAQs say tax must be paid within 30 days from the end of the month of deduction. The trade-off: the TAN step is gone, but the buyer still has to get the rate right, and the manual warns that missing seller details can trigger the higher rate under Section 397(2).
What changed for buyers of an NRI's property on 1 October 2026?
The TAN requirement was removed for individual and HUF buyers. The Schedule E user manual says Schedule E "has been introduced in Form 141 to facilitate reporting of Tax Deducted at Source (TDS)" on transfers of immovable property by a non-resident to a resident individual or HUF under Section 393(2), Table Serial No. 17. It states that "obtaining a TAN is no longer mandatory for such transactions with effect from 1st October 2026."
The Form 141 FAQ confirms the timing and the limits. It says Schedule E is usable from 1 October 2026, that only a resident individual or HUF buyer can file it, and that other assessees use the applicable TAN-based forms or statements. A company buying from an NRI, for example, is not covered by this change.
In practical terms, an individual buyer now works through the same PAN login used for personal tax filings. The Department's Form 141 user manual describes the form as "the unified challan cum statement introduced under the Income tax Act, 2025" and says each Form 141 "can report only one type of transaction," so a purchase from an NRI is reported on its own form.
Who can use Schedule E, and who cannot?
Resident individuals and HUFs buying from a non-resident. The FAQ gives the example of a resident individual buying from an NRI. It also says Schedules A, B, C and D should not be used for these transactions, and the user manual states plainly that "Resident and Non-Resident sellers cannot be reported together in the same form." Resident sellers go under Schedule B.
This matters when a Mumbai flat is co-owned by a resident and a non-resident, for example siblings who jointly own a family home where one lives abroad. In that case, the buyer files Schedule B for the resident co-owner's share and Schedule E for the non-resident co-owner's share, in separate forms. Our guide to Form 141 Schedule B covers the resident-seller side in detail.
What information does the buyer need from the NRI seller?
More than for a resident seller. The user manual lists the deductee details as PAN, name, status, contact number, email and address outside India. A Tax Residency Certificate and a Tax Identification Number are shown as optional, but the manual says that where the PAN is invalid or unavailable, the address, Tax Residency Certificate and TIN should be provided to avoid the higher rate.
The deductee's residential status must be set to "Non Resident." On the property side, the manual instructs: "Please enter the Stamp duty value of the property as per the agreement, even in case of multiple deductee" and "Enter the total consideration /sale value of the property, even in case of multiple deductees." These figures are not to be split among co-sellers.
How is the rate decided for an NRI seller?
The form does not fill it in for you. The manual asks the buyer to enter the rate of TDS "as an absolute numeric value, up to two decimal places", along with the tax deducted, including cess and surcharge. The Form 141 FAQ says there is no single prescribed rate and that the rate depends on the transaction, the provisions of the Income-tax Act, 2025, and any higher rate under Section 397(2) or lower or nil certificate under Section 395.
If the seller holds a lower deduction certificate, the manual says to "Select Yes if user has a Lower Deduction Certificate, otherwise select no", referring to sections 395(1) and 395(2), and to "Enter certificate number issued by Assessing Officer." Because the correct rate for a non-resident seller depends on the seller's own tax position, a Mumbai buyer should get the rate in writing from a chartered accountant before paying. Since the manual asks for the tax deducted including cess and surcharge, the figure entered should match the amount actually withheld from the payment made to the seller.
| Point | Schedule B (resident seller) | Schedule E (non-resident seller) |
|---|---|---|
| Provision cited | Section 393(1) | Section 393(2), Table Serial No. 17 |
| Who files | Buyer as deductor, any category of assessee | Resident individual or HUF buyer only |
| Available from | Form 141 under the 2025 Act | 1 October 2026 |
| Seller details | Seller PAN in transaction details | PAN, address outside India; TRC and TIN if PAN invalid or unavailable |
| Mixing sellers | Resident sellers only | Cannot be reported with resident sellers in the same form |
How does a Mumbai buyer file Schedule E?
Through the same Form 141 tile, after logging in. The manual lists the prerequisites as a registered e-filing user with a valid user ID and password, an active PAN, and PAN and Aadhaar linking for individuals, and notes that "Form 141 can be filled only in post-login mode only."
The steps it describes are: go to e-File, then e-Pay Tax, then New Payment; select Form 141 and choose the deductee type; enter the tax year, month of deduction and Schedule E as the nature of transaction; enter the property type and address, agreement and registration dates, stamp duty value, consideration, payment mode, buyer and seller shares and the deductee's data; enter the tax deposit details, including any interest and fee; then preview and pay. After payment, the manual says a confirmation email and SMS are sent and the challan can be downloaded from Payment History. The manual also notes that the Schedule E date calendar starts "from 01/10/2026 onwards".
What are the deadlines and how are errors fixed?
The Form 141 FAQ says tax must be paid within 30 days from the end of the month of deduction and the challan-cum-statement furnished within one month from the end of that month. Each deductor files a separate Form 141 for their own share, so joint buyers file separately. Several deductees can share one form only if they are in the same category and the tax was deducted in the same month.
Corrections are not made on the e-filing portal; the FAQ says they are made on TDS-TRACES, where the buyer must be registered as a "Taxpayer", and TDS certificates are downloaded from TDS-TRACES. If a filed form does not appear under Payment history, the FAQ says to raise a grievance on the e-filing portal. Buyers dealing with older Mumbai buildings may also want to read our report on deemed conveyance for Sterling Apartment in Andheri, since title to the land under a resale flat is a separate check from tax.
What should a buyer do before paying an NRI seller?
- Confirm the seller's residential status in writing, and whether any co-owner is resident.
- Collect the seller's PAN, address outside India, and where available a Tax Residency Certificate and Tax Identification Number.
- Ask whether the seller holds a lower deduction certificate under Section 395, and note the certificate number.
- Get the applicable TDS rate, including cess and surcharge, confirmed by a chartered accountant.
- Check that the payment date falls on or after 1 October 2026 if you plan to use Schedule E without a TAN.
- File Schedule E for non-resident sellers and Schedule B for any resident co-owner, in separate forms.
- Pay within 30 days from the end of the month of deduction and register on TDS-TRACES for certificates and corrections.
Frequently asked questions
Do I need a TAN to buy property from an NRI in 2026?
The Income Tax Department's Schedule E user manual says obtaining a TAN is no longer mandatory for transfers of immovable property by a non-resident to a resident individual or HUF with effect from 1 October 2026. Such buyers can report the tax deducted in Form 141 Schedule E using their own PAN.
Can a company use Schedule E to buy from a non-resident?
No. The Form 141 FAQ says only a resident individual or HUF buyer can file Schedule E. Other assessees use the applicable TAN-based forms or statements. It also says Schedules A, B, C and D should not be used for purchases of immovable property from non-resident sellers.
What if the NRI seller's PAN is invalid or unavailable?
The Schedule E user manual says that for an invalid or unavailable PAN, the seller's address, Tax Residency Certificate and Tax Identification Number should be provided to avoid the higher rate. If the required details are missing, tax is deducted at the higher rate under Section 397(2) of the Income-tax Act, 2025.
Can resident and NRI co-sellers be reported in one Form 141?
No. The Schedule E user manual states that resident and non-resident sellers cannot be reported together in the same form. Resident sellers go under Schedule B and non-resident sellers under Schedule E, with the stamp duty value and total consideration entered in full, not split among sellers.
This article explains official Income Tax Department guidance for general information and is not tax or legal advice.
Last updated 2026-11-09. PropNewz Team.
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