From 1 October 2026 a resident individual or HUF buying immovable property from a non-resident can pay and report the TDS through Form 141, Schedule E, under PAN login — no separate TAN. The reporting got simpler; the obligation to deduct the right amount did not. What Schedule E asks for, what protects you from the higher rate when the seller has no PAN, and the deadlines.
CA Rahul Dang
Founder & Practice Lead
If you are a resident individual or HUF buying a flat, a house or land from an NRI, the way you report the tax you withhold changed on 1 October 2026. You can now pay and report through Form 141, Schedule E, logged in with your own PAN — no separate TAN for that transaction. What has not changed is the obligation itself: you still have to work out the right amount, deduct it, and deposit it on time.
The change was made by CBDT Notification No. 121/2026 [F. No. 370142/29/2026-TPL], issued as G.S.R. 830(E) on 22 September 2026 and titled the Income-tax (Fifth Amendment) Rules, 2026. It was made under section 533 of the Income-tax Act, 2025, read with sections 395(4)(a) and 397(3)(a) and (b), and it came into force on 1 October 2026.
In substance the notification does four things:
Form 141 itself is not new. It is the consolidated challan-cum-statement under the Income-tax Act, 2025, bringing together what were the separate Forms 26QB, 26QC, 26QD and 26QE. That consolidation operates within the new framework; it does not retrospectively change which form governed a transaction under the earlier Act, and which law applies to your transaction is its own question. What is new from 1 October 2026 is Schedule E, the part of the form that deals with a non-resident seller.
This is the first thing to check, because the relaxation is narrow. The Income Tax Department's own Form 141 FAQs put it plainly: Schedule E "can be filed only by a Resident Individual or Resident HUF deductor (buyer/purchaser)", and "other categories of assessees are required to report such transactions through the applicable TAN-based TDS forms/statements".
So:
The schedule also fixes what kind of property is in scope. Schedule E asks you to select one of exactly three options: land other than agricultural land, a building or part of a building, or both. Agricultural land is not one of the choices, so a transaction involving agricultural land needs its own look at the governing provisions rather than an assumption that this route covers it.
Not for this transaction, if you are within the eligible category. Form 141 is filed only through PAN login — the Department's FAQs say it "can be filed only through the PAN login" and is submitted "exclusively through the Income Tax e-Filing Portal after logging in with valid PAN credentials".
In practice you reach it at: e-File → e-Pay Tax → select Income Tax Act 2025 → New Payment → Form 141.
The relaxation is in the Act, not merely in how the portal is built. Section 397(1)(a) requires a person deducting tax to apply for a TAN; section 397(1)(c)(iii) disapplies that for “a resident individual or Hindu undivided family in respect of a transaction where he is required to deduct tax on any consideration for the transfer of any immovable property under section 393(2) [Table: Sl. No. 17]” — which is precisely the transaction Schedule E covers.
That is a genuine simplification, and for an ordinary family buying one property it removes a real obstacle. But read it for what it is — a change to how you report and pay. It is not a concession on how much you deduct, and it does not extend to buyers outside the eligible category.
This is where most buyers get caught out, because several of the fields have to be answered with information only the seller can give you — and asking for it after you have paid is too late. Note which are unconditional: the seller’s PAN is asked for “if available”, while the contact number, email id and overseas address are mandatory either way. The schedule, as notified, asks for:
Two of these deserve to be called out, because they are easy to read past.
First, the form captures the stamp duty value and the sale consideration separately, and then asks for "amount on which tax is liable to be deducted" as its own figure. The form does not tell you which governs. That is determined by the charging provision, on the facts of your transaction — not by the reporting form.
Second, the status field is a code, not free text. The notified list runs: 01 company other than a domestic company, 02 individual, 03 HUF, 04 AOP (except an AOP of only companies), 05 AOP of only companies, 06 co-operative society, 07 firm, 08 body of individuals, 09 artificial juridical person, 10 others.
This is where the money is, so it is worth going to the rule rather than to a summary of it.
The higher rate comes from section 397(2). Section 397(2)(a) requires a payee to furnish a valid PAN to the deductor. Where that is not done, s.397(2)(b)(i) requires deduction at the higher of three things: (A) the rate specified in the relevant provision of the Act; (B) the rate or rates in force; or (C) 5% where deduction is required under s.393(1) [Table: Sl. No. 8(ii) or 8(v)], or 20% in any other case.
That 20% is worth reading carefully, because it is widely quoted out of shape. It is the figure in limb (C) for cases outside those two entries — it is not a flat 20% rate for a property sale. It only enters at all where a valid PAN has not been furnished, it is compared against limbs (A) and (B) with the highest prevailing, and it does not apply where the rule 217 conditions below are met. Treat it as a consequence of missing documentation, not as the rate for the transaction.
Section 397(2)(c)(ii) then lets that be disapplied for a non-resident “subject to such conditions, as may be prescribed”. The prescribed conditions are rule 217 of the Income-tax Rules, 2026, whose title is exactly that: Conditions under section 397(2)(c) for non-application of deduction of tax at higher rate, in case of non-residents.
Rule 217(1) disapplies the higher rate where the deductee has no PAN, for payments including “payments on transfer of any capital asset” — if the deductee furnishes the details and documents in sub-rule (2) to the deductor. Rule 217(2) lists four items:
One scope point before the list. The limb this relief rests on is a payment “on transfer of any capital asset”, and section 2(22) defines a capital asset as property of any kind held by an assessee but excludes “any stock-in-trade — consumable stores or raw materials held for business or profession”. So this route assumes the property is a capital asset in the seller’s hands. Where the seller deals in property and holds it as stock-in-trade, rule 217(1) does not apply on its own terms, and the position needs separate advice.
So the protection is the whole set, and it includes the overseas address. Form 141’s Note 6(b) mentions only the TRC number and the TIN, but that is not a narrower rule — Note 6(a) has already made the contact number, email id and overseas address mandatory in every case, so the note only needs to call out the two fields the form does not otherwise compel. Treat rule 217(2) as the requirement, not Note 6(b) — while noting that two of its four items are conditional on their own terms: the residence certificate only where that country’s law provides for one, and the tax identification number or, where none exists, the number by which that government identifies the seller.
Two further points that are easy to miss. The documents are furnished by the seller to the buyer — rule 217(1) says “to the deductor”, so you cannot assemble them yourself and they must actually be handed over. And rule 217(3) separately disapplies the higher rate where the non-resident is not required to apply for a PAN at all under section 262.
One bounded caveat, and only if your seller is a company rather than an individual. The Act and the rule describe the eligible non-resident in slightly different words, and the difference could matter where the seller is a foreign company. The point is genuinely unsettled, and this article does not resolve it. The practical course is simply this: if you are buying from a non-resident company, do not rely on the rule 217 route without transaction-specific advice. That is risk control, not a conclusion that the relief is unavailable to such a seller. For the ordinary case this article is about — an individual NRI seller — the question does not arise, and rule 217 applies on its terms.
Collect the full set before the payment or credit that triggers the deduction. Afterwards your options narrow considerably.
Schedule E has two distinct certificate fields, and the distinction is in the notification itself:
The notification separately amends Note 3(c) to recognise a certificate under section 395(6) issued by the prescribed income-tax authority.
In other words, the form anticipates that the relief may have been obtained by either side, and it wants to know which. If a seller tells you a certificate exists, establish whose it is and under which sub-section, because they go in different boxes. Our guide to lower-deduction certificates on NRI property sales covers why these certificates matter so much on a large transaction. It was written on the framework of the earlier Act, so read it for the commercial logic rather than for the section numbers and forms, which have changed.
If you are buying with a spouse, a parent or a sibling, do not assume one of you can file for everyone. The notification is explicit — Note 11: "In case of more than one deductor, each deductor has to file separate form."
The Department's FAQs say the same thing from the other direction: each deductor files a separate Form 141 "for their respective share of the amount liable for TDS".
So two joint buyers means two Form 141 filings, each for that buyer's own share — even though there is one sale agreement and one property. The buyer table in Schedule E is what ties them together: every buyer is listed with their percentage, and the percentages must total 100%.
The position is different for multiple sellers. A single deductor can cover several deductees on one Form 141, but only where all the deductees are in the same category (corporate or non-corporate) and the tax was deducted in the same month. Mix the categories, or the months, and you are back to separate forms. The category itself is read off the PAN: the deductee is corporate only where the fourth character of the PAN is "C".
Schedule E handles instalments directly, and it keeps a thread between them. It asks whether the payment is lump sum or by instalments and, if by instalments, whether this is the first, a subsequent, or the last one. For a subsequent or last instalment it asks for the acknowledgement number of the previous filing. For the last instalment it asks for the total consideration paid or credited including that instalment.
The practical consequence: keep the acknowledgement number from every filing on the property. Treating each instalment as a standalone event will leave you unable to complete the next one.
Two obligations, both running from the end of the month in which you deducted. The figures are in the Rules, not only in the Department’s guidance, and that matters here because the two sources do not quite agree.
Both rules say thirty days. The Department’s Form 141 FAQ, however, gives the furnishing deadline as within one month from the end of that month. Depending on the month, “thirty days” and “one month” can produce different deadlines.
Where a rule and a FAQ differ, the rule governs. Follow the thirty-day period prescribed by rule 219(5), notwithstanding the FAQ wording — and work to thirty days from the end of the month of deduction for the payment as well, under rule 218(3). The Fifth Amendment Rules brought this transaction inside rule 218(3) and rule 219(5) by inserting a new clause into each, so the thirty-day period applies to a purchase from a non-resident in the same way it already applied to a purchase from a resident.
The month that matters is the month of deduction. Form 141 asks for a “month of deduction”, and a separate form is required for each distinct month.
Notification 121/2026 is a procedural instrument. It changes the form and the rules that route a transaction to it. It does not set a rate, and it does not define the base.
The charging entry is section 393(2), Table Sl. No. 17. Set it beside the entry that applies when the seller is a resident and the gap is obvious:
Three consequences. There is no 1% and no fifty-lakh threshold anywhere in the non-resident entry. The rate is “rates in force”, which has to be read with the relevant Finance Act schedule and any treaty position rather than lifted from the section. And the base is “the amount of such income or sum” where the sum is one chargeable under the provisions of the Act — a different question from the figure written on the agreement, and the reason Schedule E asks for “amount on which tax is liable to be deducted” as a field of its own instead of deriving it from consideration or stamp duty value.
Section 393(2) also fixes the timing: deduction is at credit to the payee’s account or payment, whichever is earlier. And Note 3(b) to serial number 17 extends the obligation to all persons “whether or not, the non-resident person has… a residence or place of business or business connection in India”.
The Act does provide a route for exactly this difficulty, and it is worth knowing before you guess. Section 395(2) lets the payer — you, the buyer — apply to the Assessing Officer “where he considers that the whole of such sum would not be chargeable in the case of the recipient”. The application is for “determination of the appropriate proportion of the sum chargeable to tax”, and once the Assessing Officer determines it, “the tax shall be deducted under section 393(2) (Table: Sl. No. 17) only on that proportion of sum which is chargeable to tax”. The application is made in Form No. 129 under rule 214, and rule 214(2) requires the officer to examine chargeability “read with the relevant Double Taxation Avoidance Agreement, if any”. Separately, section 395(1) is the seller’s own application for a lower or nil deduction certificate, in Form No. 128 under rule 213; and since 1 April 2026 section 395(6) allows that application to be made to a prescribed income-tax authority for electronic verification as well as to the Assessing Officer.
Read that mechanism for what it is. It is the Assessing Officer who determines the chargeable proportion, not you. Until a determination is made, there is no basis for deducting on a reduced figure under the section 395(2) route: forming a private view that part of the price is not chargeable, and withholding on that part only, is not what section 395(2) permits — it is what section 395(2) exists to replace. A certificate the seller has already obtained under section 395(1) is a different thing and operates on its own terms. Nor does any of this establish that only a gain, rather than the whole sum, is within the charge; that depends on the charging provisions and the facts, and this article does not decide it.
Two cautions remain. The form’s separate “amount on which tax is liable to be deducted” field is a reporting field, not a rule of computation — it records the figure you have arrived at under the Act; it does not determine it, and neither does the stamp duty value the form also captures. And “rates in force” is a domestic starting point: it does not override treaty relief, and where a double taxation avoidance agreement applies the entitlement under it has to be analysed on the seller’s residence and the facts. This article takes no position on either the chargeable sum or any treaty entitlement, and no figure here should be read as supplying one.
The Department's FAQs are equally direct: there is no single prescribed TDS rate for Form 141. Tax is deducted at the rate prescribed under the relevant provisions of the Income-tax Act, 2025; or at the higher rate where section 397(2) applies; or at the rate specified in a certificate issued under section 395(1) or 395(2).
Two warnings follow, and both are easy to walk into:
One more thing the notification does settle: Note 10 confirms that the amount of tax deducted at source "shall include surcharge, if applicable, and cess". The figure you deposit is the all-in figure.
Where the consideration is large, where there are several sellers, where instalments are involved, or where a treaty may be in play, the amount should be determined on the facts before you pay — not reconstructed afterwards.
Corrections to Form 141 cannot be made on the e-filing portal. The Department's FAQs say correction is available only through the TDS-TRACES portal, and that to use it you must first register there as a "Taxpayer".
That matters because you file on one portal and fix mistakes on another. Budget for that registration rather than discovering it mid-correction.
There is also a step after filing that buyers routinely miss. Section 395(4)(a) requires every person deducting tax to issue a certificate to the deductee showing the amount and the rate. Under rule 215(1), as amended by the same notification, this transaction now sits in the row that calls for Form No. 132, to be furnished within fifteen days from the due date for furnishing the challan-cum-statement in Form No. 141. Rule 215(1) requires the certificate to be generated and downloaded from the web portal specified by the Director General of Income-tax (Systems); the Department’s FAQ identifies that portal as TRACES. Your NRI seller will need it to claim the credit in their own return.
And if the payment is a remittance abroad, note that rule 220 separately requires information in Form No. 145 for a sum paid to a non-resident, with an accountant’s certificate in Form No. 146 above a Rs. 5,00,000 threshold in the cases that rule specifies. That is why Schedule E asks for the acknowledgement number of the corresponding Form No. 145. It is a separate obligation from Form 141, not an alternative to it.
Six forms can touch one purchase from a non-resident. They are not alternatives to each other.
| Form | Who | What it does | When |
|---|---|---|---|
| 141, Schedule E | Buyer (deductor) | Challan-cum-statement: pays and reports the TDS | Within thirty days from the end of the month of deduction (rules 218(3) and 219(5)) |
| 132 | Buyer (deductor) | TDS certificate issued to the seller, under s.395(4)(a) | Within fifteen days from the Form 141 due date (rule 215(1), Table Sl. No. 3 as amended); downloaded from TRACES |
| 128 | Seller (deductee) | Application for a lower or nil deduction certificate under s.395(1) | Rule 213 prescribes no deadline; a certificate can only help if it exists before the deduction |
| 129 | Buyer (deductor) | Application under s.395(2) for determination of the proportion chargeable | Rule 214 likewise prescribes no deadline; the determination has to precede the deduction to affect it |
| 145 | Buyer (payer) | Information on a sum paid to a non-resident: Part A, B or C by amount and circumstances, Part D where the sum is not chargeable (rule 220) | Per rule 220; Schedule E asks for its acknowledgement number |
| 146 | An accountant | Certificate supporting Form 145 Part C | Where the payment exceeds Rs. 5,00,000 in the cases rule 220(1)(c) specifies |
Forms 128 and 129 are the two that have to be thought about before money moves. Everything else follows the deduction.
Before you sign, and certainly before you pay:
At RDA Tax Advisory Services, Baner, Pune, we run the buy-side of NRI property transactions end to end: establishing the seller's status, determining the correct withholding on the facts, collecting and checking the TRC and TIN, dealing with lower-deduction certificates, filing Form 141 Schedule E for each buyer, and keeping the instalment chain straight. We also act for NRI sellers, where the same transaction is seen from the other side — see our NRI tax services, TDS compliance and property strategy pages, and our guide to capital gains on a property sale.
The cheapest point to fix a withholding problem is before the money moves. Buying from an NRI? Talk to RDA before you pay the first instalment — Office No. 102, Snehraj Apartment, Baner, Pune 411045.
This article explains a reporting change and the information the notified form requires. It is not transaction-specific advice. The rate of deduction and the amount on which tax is deducted are governed by the Income-tax Act, 2025 and depend on the facts of the transaction; they are not determined by the notification described here, and nothing above should be used as a substitute for determining them. Verify the position in force for your transaction before you deduct.
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