Buying property from an NRI? Concerned about obtaining a TAN? Not anymore. To reduce the compliance burden, the Budget has proposed that resident individuals and HUFs are not required to provide Tax Deduction and Collection Account Number (TAN) if they are purchasing property from a Non-Resident Indian (NRI). The amendment will be effective from October 1, 2026.Under the proposed framework, resident individuals or HUFs can report Tax Deducted at Source (TDS) by quoting PAN, as is done when the transaction is between two residents. At present, if a person purchases immovable property from a resident seller, the person is not required to obtain a TAN to deduct tax at source. However, where the seller of immovable property is non-resident, the buyer is required to obtain TAN to deduct tax at source.Ameet Patel, partner, Manohar Chaudhary & Associates, said it used to be a detailed process. “At present, if a resident purchases immovable property from an NRI, there is no separate exemption with respect to compliance with TDS responsibilities. As a result, in such cases, the buyer will have to obtain a TAN, register on the portal and then deduct TDS under Section 195, and make payment to the government. Under Section 195, like all other regular TDS sections, a quarterly e-TDS statement will be required. “Professional help will be required.”CA Hinesh Doshi welcomed the move. “This was causing unnecessary compliance burden. While the process of obtaining TAN is simple, people used to obtain TAN only for one transaction. Hence, this is a good relief.”
