How to Pay TDS on Purchase of Property from NRI – TY 2026-27

Where a resident buyer purchases immovable property from a Non-Resident Indian (NRI), tax is required to be deducted at source before making payment to the seller. Under the new Income-tax Act, 2025, the provisions relating to such transactions are covered under Section 393(2) [Table: Sl. No. 17] and, for the purpose of payment and return filing under the TAN-based mechanism, the relevant code is 1057. These provisions are applicable from 1st April, 2026.

Further, CBDT Notification No. 121/2026 dated 22nd September, 2026 has introduced a PAN-based payment and reporting mechanism through Form 141 – Schedule E for resident Individuals and Hindu Undivided Families (HUFs) purchasing immovable property from non-residents, effective from 1st October, 2026.

Quick Reference – Section Mapping & Reporting

• New Section (IT Act 2025): Section 393(2)
• Table Reference: Sl. No. 17
• Nature of Payment: Purchase of immovable property from NRI
• Resident Individual / HUF from 1st October, 2026: Form 141 – Schedule E (PAN-based)
• Other Buyers: Form 144 (TAN-based)
• Tax Code for Form 144: 1057

TDS Payment and Reporting

Up to 30th September, 2026, TDS on purchase of property from an NRI was required to be deposited and reported through the TAN-based mechanism.

From 1st October, 2026, a resident Individual or HUF purchasing immovable property from a non-resident can deposit and report TDS using PAN through Form 141 – Schedule E. Such buyers are not required to obtain a TAN solely for these transactions.

For other buyers, such as a Company, Firm, LLP or other entity, the TAN-based mechanism continues and the transaction is required to be reported in Form 144 using Tax Code 1057.

When is TDS required to be deducted?

TDS is required to be deducted by the resident buyer at the time of credit or payment to the NRI seller, whichever is earlier.

Rate of TDS

In case of purchase of property from an NRI, the rate of TDS depends upon the nature of income chargeable in the hands of the seller, such as:

• Long-term capital gains, or
• Short-term capital gains

Since the seller is a non-resident, the TDS implications are different from purchase of property from a resident seller. The provision of 1% TDS applicable in resident property purchase cases does not apply here.

Depending on the facts of the case, surcharge and health / education cess may also become applicable.

Return Filing

For resident Individuals and HUFs covered by the PAN-based mechanism, Form 141 – Schedule E is required to be furnished within 30 days from the end of the month in which TDS is deducted. Where multiple buyers are involved, each buyer is required to furnish a separate Form 141. For instalment transactions, previous payment and acknowledgement details are also required to be reported, wherever applicable.

For transactions reported through Form 144, apart from selecting the correct Tax Code 1057, the relevant Remittance Code also needs to be selected under the deductee details, based on the nature of income / capital gain applicable in the hands of the NRI seller.

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