Starting October 1, 2026, individuals and Hindu Undivided Families (HUFs) purchasing immovable property from non-resident Indians (NRIs) can now file Tax Deducted at Source (TDS) more easily. The Income Tax Department has introduced Schedule E of Form 141, allowing eligible buyers to report and pay TDS through the Income Tax e-Filing portal using their Permanent Account Number (PAN), without the need to obtain a Tax Deduction and Collection Account Number (TAN).
- Buyers can use Schedule E of Form 141 for TDS reporting and payment.
- Obtaining a TAN is no longer mandatory for these transactions from October 1, 2026.
- The process is done through the Income Tax e-Filing portal using the buyer's PAN.
- Separate forms are required if the transaction involves both resident and non-resident sellers.
- Buyers must provide detailed property and transaction information when filing.
What is Schedule E of Form 141 and who can use it?
Schedule E of Form 141 is a new provision introduced by the Income Tax Department to simplify TDS reporting and payment for immovable property transactions where the seller is a non-resident. Eligible resident individuals and HUFs purchasing property from NRIs can use this schedule to report the transaction and pay TDS through the e-Filing portal using their PAN.
How does the new rule change the TDS filing process?
Previously, buyers needed to obtain a TAN to deduct and deposit TDS when purchasing property from NRIs. From October 1, 2026, this requirement has been removed. Buyers can now file TDS using Schedule E of Form 141 on the Income Tax e-Filing portal by logging in with their PAN. This change reduces paperwork and streamlines the process.
What are the steps to file Form 141 Schedule E on the Income Tax e-Filing portal?
- Log in to the Income Tax e-Filing portal using your user ID and password.
- Select the option for New Payment and proceed with the Form 141 payment.
- Choose the appropriate deductee type: Corporate Deductee or Non-Corporate Deductee.
- Enter deductor details such as tax year, month of deduction, and nature of transaction.
- Provide property details including type, address, stamp duty value, sale consideration, and payment method.
- Fill in details of all buyers and sellers, including PANs, ownership shares, and contact information.
- Enter transaction and TDS details like amount liable for TDS, deduction rate, and dates.
- Select the payment mode, review all information, and complete payment through the bank's payment page.
- Download the challan receipt after successful payment. Payment history is also available on the portal.
What specific information must buyers provide when filing?
Buyers need to provide comprehensive details including:
- Complete address of the immovable property.
- Agreement and registration dates, if available.
- Total stamp duty value and sale consideration.
- Whether payment is lump sum or in installments.
- Details of all buyers, including PAN and ownership percentages.
- Details of all sellers, including PAN, name, status, contact info, overseas address, and share in the property.
- Transaction details such as amount liable for TDS, deduction rate, amount deducted, and relevant dates.
- Tax Residency Certificate and Tax Identification Number details, if applicable.
Are there any special instructions regarding multiple deductees or mixed seller types?
If multiple deductees are included in the same form, they must belong to the same category (corporate or non-corporate) and have the same month of deduction. Corporate and non-corporate deductees cannot be combined in one form. Additionally, if the property transaction involves both resident and non-resident sellers, separate forms must be filed: Schedule B for resident sellers and Schedule E for non-resident sellers.
What happens if the seller's PAN is invalid or unavailable?
To avoid deduction at a higher tax rate under Section 397(2), buyers must provide the seller's overseas residential address and other details if the PAN is invalid or unavailable. Failure to provide these details will result in TDS being deducted at the higher prescribed rate.
Frequently Asked Questions
Q: Do I need a TAN to file TDS when buying property from an NRI after October 1, 2026?
A: No, obtaining a TAN is no longer mandatory. You can file TDS using Schedule E of Form 141 on the Income Tax e-Filing portal with your PAN.
Q: Can I file one Form 141 for both resident and non-resident sellers?
A: No, you must file separate forms. Use Schedule B for resident sellers and Schedule E for non-resident sellers.
Q: What details are required if the seller does not have a valid PAN?
A: You must provide the seller's overseas residential address and other relevant details to avoid higher TDS rates.
