CBDT Introduces New TDS Reporting for Property Bought from Non-Residents

From 1 October 2026, resident Individuals and HUFs purchasing immovable property from a non-resident seller will have a simplified TDS compliance mechanism. CBDT Notification No. 121/2026 dated 22 September 2026 introduces a new Schedule E in Form 141 for reporting such transactions.

What Has Changed?

The Income-tax (Fifth Amendment) Rules, 2026 have amended the TDS reporting framework for property transactions involving non-resident sellers.

Under Section 393(2) of the Income-tax Act, 2025, tax is required to be deducted from consideration payable for transfer of immovable property by a non-resident.

From 1 October 2026:

• A resident Individual or HUF purchasing property from a non-resident can use Form 141 for TDS payment and reporting.
• A separate TAN is not required for such a transaction, subject to the conditions prescribed under Section 397(1)(c).
• A new Schedule E has been introduced in Form 141 specifically for these transactions.
• Form 132 has also been amended for issuing the TDS certificate to the non-resident seller.

The amendment is effective from 1 October 2026 as per CBDT Notification No. 121/2026, G.S.R. 830(E), dated 22 September 2026.

Schedule B vs Schedule E

It is important to select the correct schedule based on the residential status of the seller:

• Schedule B – TDS on purchase of immovable property from a resident seller.
• Schedule E – TDS on consideration paid for immovable property transferred by a non-resident to a resident Individual or HUF.

Therefore, transactions involving a non-resident seller should not be reported under Schedule B from 1 October 2026.

What Details Are Required in Schedule E?

The new Schedule E requires comprehensive information about the property, buyers, sellers and TDS computation, including:

• Address and type of immovable property
• PAN and details of all buyers
• Details of all non-resident sellers
• Seller's residential status
• Overseas address and contact details of the seller
• Tax Residency Certificate (TRC) details
• Foreign Tax Identification Number (TIN), where applicable
• Stamp Duty Value (SDV)
• Total sale consideration
• Agreement and registration details
• Payment or instalment details
• Nature of capital gains, where required
• Applicable TDS rate
• Details of any certificate issued under Section 395
• Amount of tax deducted, including applicable surcharge and cess

Where the non-resident seller does not have a PAN, prescribed overseas identification and tax residency details become particularly important for the reporting and applicable TDS treatment.

What Should Property Buyers Do?

Individuals and HUFs planning to purchase property from a non-resident should collect the required information before making payments.

A practical checklist includes:

1. Confirm the residential status of the seller.
2. Obtain the seller's PAN, if available.
3. Collect overseas address and contact details.
4. Obtain the seller's Tax Residency Certificate and foreign TIN/identification details where applicable.
5. Verify the sale consideration and Stamp Duty Value.
6. Check whether the seller has obtained a lower or nil deduction certificate under Section 395.
7. Determine the applicable TDS rate before making payment.
8. File Form 141 using the new Schedule E and retain the acknowledgement.
9. Issue the prescribed TDS certificate in Form 132 to the seller.

The new mechanism simplifies the procedural burden for resident Individuals and HUFs, particularly because they no longer need to obtain a separate TAN solely for the covered non-resident property transaction. However, the underlying TDS obligation continues and must be complied with correctly.

Key Takeaway

The introduction of Schedule E in Form 141 creates a dedicated PAN-based reporting mechanism for resident Individuals and HUFs purchasing immovable property from non-residents.

While the new framework reduces procedural complexity, buyers should pay close attention to the seller's residential status, TDS rate, overseas identification details and reporting requirements to avoid errors in the transaction.

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