Quick answer
Buying property from an NRI seller gets new paperwork from 1 October 2026, not a new tax. A CBDT rule moves this purchase onto Form 141, the same form resident-to-resident deals already use, with a new Schedule E built for it. Schedule E asks for the seller’s tax residency certificate number and their foreign tax ID — before you pay, not after. Collect both early. Once the seller has your money, you have no way to make them hand over the paperwork.
This applies to you if you are buying a flat, plot or building from a seller who is a non-resident for tax purposes, and you are the one deducting and paying the tax on that purchase.
On this page
- What changed, and when
- Schedule E: what you now collect before you pay
- The seller’s tax ID is your leverage — use it before you pay
- Buying with someone else? You each file your own form
- Buying property from an NRI? Do this before signing
- Why this matters most in redevelopment and land deals
- Key takeaways
- Frequently asked questions
- Primary sources
A note on section numbers: the Income-tax Act 2025 replaced the Income-tax Act 1961 from 1 April 2026. The old TDS rule for buying from a non-resident was Section 195. It is now Section 393(2), Table serial 17. The old TDS certificate form is now Form 132. The old challan-cum-statement, Form 26QB, is now Form 141. This article uses the 2025 Act numbers throughout and gives the old ones once, here, for readers still holding older paperwork.
Buying a flat from someone who lives outside India used to run on its own track. You got a TAN. You deducted under a different rule. You filed a separate return each quarter. A new CBDT notification changes that track from 1 October 2026. The tax you owe does not change. What changes is the paperwork: what you collect, from whom, and before which date.
What changed, and when
CBDT issued Notification No. 121/2026-Income Tax on 22 September 2026, under gazette number G.S.R. 830(E). Its short name is the Income-tax (Fifth Amendment) Rules, 2026. It takes effect on 1 October 2026 — a week after it was issued.
The notification does one main thing. It moves the rule for deducting tax on a non-resident’s property sale into the same set of forms already used for resident sellers. Before this, a resident buyer bought from a non-resident seller under one set of rules and forms. A resident buyer bought from a resident seller under a different, simpler set. From 1 October, both routes share Form 141 and its supporting machinery — but the non-resident route gets its own new schedule inside that form, built for the extra detail a cross-border sale needs.
Three rules changed to make this work: Rule 215, Rule 218 and Rule 219 of the Income-tax Rules, 2026. Each now names the non-resident case as a listed category, next to the resident case it already covered. You do not need to read the rules yourself. What you need to know is what they produce: a new Schedule E, described below.
Buying property from an NRI seller?
The new Schedule E, what to collect before you pay, and the one thing this rule does not settle.
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Schedule E: what you now collect before you pay
Form 141 already had schedules for the usual resident-to-resident sale. The Fifth Amendment adds Schedule E, built only for a purchase from a non-resident seller.
Schedule E asks for the property address and type, and your own PAN and name as the buyer. If more than one of you is buying, it asks what share of the price each buyer paid, and those shares must add up to the full amount.
Then it asks about the seller, in ten separate fields. Some are routine: name, phone number, email. Two are new work for you: the seller’s tax residency certificate number, and the seller’s tax ID number in the country where they pay tax. Schedule E also wants the seller’s overseas address, the sale date, the stamp duty value, whether the gain is long-term or short-term, and the rate you deducted at. The resident-seller route, and the two other provisions that fire on an under-priced sale, are covered in the circle-rate piece.
None of this is optional detail you can skip and fix later. You cannot get a seller’s foreign tax ID number after you have paid them and they have left the country.
The seller’s tax ID is your leverage — use it before you pay
Here is why those two fields matter more than the rest of the form.
Say you are buying a flat for Rs 1.2 crore from an NRI seller with no Indian PAN, common after years abroad. Without more information, the rules default you to a higher deduction rate. That default rate, under Rule 217, is the safe assumption when the department has nothing else to go on.
Give two pieces of information instead, and you may deduct at a lower, treaty-based rate: the seller’s tax residency certificate number, and their foreign tax ID number. Both prove where the seller actually pays tax, which is what a tax treaty rate depends on.
The catch is timing. A seller who has already received your full payment has no reason to spend an afternoon requesting a residency certificate from a foreign tax office so that you can deduct less. Ask before you pay, while you still have something to offer in return — not after, when you are only asking for a favour.
Editor’s Analysis · Utkarsh Garg
In my POV this is a broker’s job that keeps landing on the buyer. On most deals I see, whatever needs fixing on the tax side gets fixed before execution — a broker who knows his work raises it at the negotiation table, not at the registration desk. When it is missed, nobody finds out at the sub-registrar. It surfaces weeks later, and then it is a CA, a rectification, and a process longer and messier than the original ask would ever have been. Both sides lose time, and by then the seller has usually left the country.
What buyers get wrong is treating this as the seller’s paperwork. Even buying a litre of milk we turn the packet over and check the FSSAI mark. A flat is the largest single purchase most people make, and the same instinct belongs there — ask during negotiation what the seller’s residency status is, and what documents come with it.
One thing worth being exact about, because agreements of sale often read the other way. You can write into the agreement who bears the cost of the capital-gains tax, and that clause is worth having. What you cannot write away is who the department holds responsible. The capital gain stays the seller’s liability; the duty to deduct is the buyer’s, and if the deduction is short or missed, the notice comes to the buyer whatever the agreement says. Before you pay, you hold 100 per cent of the consideration and all of the leverage. After you pay you hold none of it, and you are asking a favour from someone in another country.
Buying with someone else? You each file your own form
Most flats are bought by more than one person — a couple, or a parent and child. Note 11 to Schedule E has a specific instruction for this: where there is more than one buyer, each buyer deducting tax is a separate deductor, and each deductor files their own Form 141.
That means two buyers do not file one joint form. They file two, and between them, the share of the price each one is shown to have paid must add up to the full sale amount. If your form says you paid 60% and your co-buyer’s form says 55%, the two forms do not reconcile, and that is a flag the department can raise on either of you.
Agree the split with your co-buyer before either of you fills in a form, not after both forms are already submitted.
Buying property from an NRI? Do this before signing
Ask the seller for their tax residency certificate and their foreign tax ID number as part of the deal, not as an afterthought once you have paid. Put it in the agreement to sell, if the seller will agree to that.
Confirm whether the seller has an Indian PAN early. If they do not, that is exactly when Rule 217’s higher default rate applies unless you have the two documents above.
Budget for the other costs on the deal too. Stamp duty varies sharply by state — our state-by-state guide has current rates. If you are choosing between an under-construction flat and a ready one from the same seller, that decision carries its own tax trade-offs.
If you are buying with someone else, agree the payment split in writing before either of you touches Form 141. Both your forms need to show the same numbers.
One claim this article does not make: whether a buyer in this route still needs a TAN, the way the old non-resident rule required. Some early commentary says TAN is no longer needed at all. The notification itself does not say that in plain words, and it turns on rules this article has not yet confirmed against their bare text. Do not assume either answer. Ask your chartered accountant to check your specific case before you rely on it.
Why this matters most in redevelopment and land deals
An NRI seller is not only someone selling a flat outright. An NRI seller is not always a flat owner selling outright. A landowner who has moved abroad, and is handing land to a developer under a redevelopment or joint development deal, can fall into this same route. The paperwork above then applies to the developer, not just to a retail buyer.
A developer doing a deal with an NRI landowner should settle the residency certificate and the foreign tax ID at signing. Treat them as deal terms, alongside the revenue-share versus area-share decision, not as a compliance step to chase after the agreement is registered. The same deal often raises the co-promoter question a JDA quietly creates, which is worth checking alongside the tax paperwork.
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Subscribe freeKey takeaways
- From 1 October 2026, buying property from a non-resident seller moves onto Form 141 and its new Schedule E — a machinery change, not a change in the tax owed.
- Schedule E asks for ten details about the seller, including two you must collect in advance: their tax residency certificate number and their foreign tax ID number.
- Without those two details, and without the seller’s Indian PAN, Rule 217 defaults you to a higher deduction rate.
- Ask for both before you pay. A seller who already has your money has no reason to help you deduct less.
- Joint buyers each file their own Form 141. Agree the payment split before either of you files, since the shares must add up to the full price across both forms.
- This article does not say whether a TAN is still required for this route. That claim needs the bare rules read in full, not secondary commentary. Check with your CA.
- The same collection discipline applies to a developer paying an NRI landowner under a redevelopment or joint development deal.
Frequently asked questions
What changed for buying property from an NRI seller from 1 October 2026?
The Income-tax (Fifth Amendment) Rules, 2026 — Notification No. 121/2026-Income Tax, G.S.R. 830(E), dated 22 September 2026 — move this purchase onto Form 141, the same challan-cum-statement form used for resident-to-resident sales, with a new Schedule E built for the non-resident case. The change takes effect 1 October 2026. It changes the form and the information collected, not the underlying tax rate or liability.
What is Schedule E on Form 141?
Schedule E is a new part of Form 141, added by the Fifth Amendment Rules, that a buyer completes when the seller of a property is a non-resident. It asks for the property details, the buyer’s share of the price, and ten fields about the seller — including, where the seller has no Indian PAN, their tax residency certificate number and their tax ID number in their own country.
Why do I need the seller’s tax residency certificate before I pay?
Under Rule 217, a deduction defaults to a higher rate when the seller has no Indian PAN and you have not provided their tax residency certificate number and foreign tax ID number. Those two details let you deduct at a treaty-based rate instead. A seller who has already been paid in full has little reason to chase this paperwork afterward, so the practical answer is to collect it before you pay, not after.
Do joint buyers file one Form 141 or separate forms when buying from an NRI?
Separate forms. Note 11 to Schedule E states that where there is more than one deductor — the common case being joint buyers — each deductor files their own Form 141. The proportion of the sale price shown as paid by each buyer must add up to 100% across all the forms filed, so the buyers need to agree the split before filing.
Does a buyer still need a TAN to buy property from an NRI seller after 1 October 2026?
This article does not answer that either way. Some commentary says a TAN is no longer needed under the new route. The notification itself does not say so in plain terms. Confirming it needs a read of Rule 215(1) Table serial 3 and Section 397 of the Income-tax Act, 2025 — and that read has not been done yet. Ask your chartered accountant to confirm the position for your specific transaction rather than relying on either assumption.
The bottom line
Buying a flat from an NRI seller is not getting simpler or harder from 1 October 2026 — it is getting more specific. Form 141’s new Schedule E wants the seller’s tax residency certificate and foreign tax ID before you pay, not after, and joint buyers now each file their own form with proportions that must reconcile. Collect the paperwork at signing, while you still have leverage to ask for it.
Structuring a purchase or a redevelopment deal with a non-resident seller or landowner?
Get the TDS and documentation requirements modelled before you sign — from someone who structures these deals on the developer side. Land & Development Advisory →
For the wider property-tax pillar this sits inside, see our Real Estate guide.
Primary sources
- Notification No. 121/2026-Income Tax, G.S.R. 830(E), 22 September 2026 — Income-tax (Fifth Amendment) Rules, 2026, issued under Section 533 read with Sections 395(4)(a) and 397(3)(a) and (b) of the Income-tax Act, 2025 (30 of 2025). In force 1 October 2026. Read in full. Official text
- Amends Rule 215(1) Table serial 3, Rule 218(3) and Rule 219(5) of the Income-tax Rules, 2026 (parent notification G.S.R. 198(E), 20 March 2026; last amended by G.S.R. 822(E), 17 September 2026), and Forms 132 and 141 in Appendix III.
- Section 393(2), Table serial 17, Income-tax Act, 2025 — successor to Section 195 of the Income-tax Act, 1961 (payments to non-residents). Section 395(1) and 395(2) — successor to Sections 197 and 195(2)-(3) (lower-deduction certificates).
- Commencement — the Income-tax Act 2025 took effect on 1 April 2026 and applies from FY 2026-27. The Income-tax Act 1961 stands repealed but continues to govern earlier tax years.
- Secondary source, used only for the flagged TAN question and not relied on for any other claim: TaxGuru, “CBDT Amends TDS Rules for Non-Resident Immovable Property Transfers”, 27 September 2026.
Buying property from an NRI seller?
The new Schedule E, what to collect before you pay, and the one thing this rule does not settle.
One email when something changes. No daily digest.
General disclosure: This article is for educational and informational purposes only. It does not constitute tax, legal or financial advice. The specific risk on this page is that whether a TAN is still required for this route is not settled here and needs a chartered accountant’s confirmation for your own transaction. Verify current requirements at incometax.gov.in before any transaction, and note that the Income-tax Act 2025 replaced the Income-tax Act 1961 from 1 April 2026, so section numbers in older commentary elsewhere may refer to the repealed Act. See our full disclaimer.
Editorial note: Parts of this article were prepared with AI assistance. All statutory claims were verified against the official text of Notification No. 121/2026-Income Tax on incometax.gov.in before publication, except where marked as unverified above.
Keep reading
This article is part of our real estate guide — the full set of explainers for salaried Indians, in the order you actually meet them.