Section 393(2) Applies — Not the Regular Resident-Property TDS Provision

For a property transaction involving a non-resident seller, the applicable provision is Section 393(2), Table Serial No. 17, rather than the ordinary TDS provision applicable to property purchases from a resident under Section 393(1).

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What Did CBDT Notify on 22 September 2026?

The CBDT Notification No. 121/2026 dated 22 September 2026 introduces important procedural amendments relating to TDS on purchases of immovable property from non-residents.

The notification makes changes to Rules 215, 218 and 219 and revises Forms 132 and 141. These amendments will take effect from 1 October 2026.

Broadly, the changes can be divided into four key areas:

1. TAN exemption for eligible Individuals and HUFs
2. Procedure for depositing TDS
3. Reporting of TDS through Form 141
4. Issuance of TDS certificate through Form 132

Let us look at each change in detail.

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1. TAN Will Not Be Required from 1 October 2026

The most significant relief comes from the amendment to Section 397.

A resident Individual or HUF who is required to deduct TDS on consideration paid for the transfer of immovable property to a non-resident will no longer need to obtain a TAN, subject to the conditions prescribed under the law.

The Finance Act, 2026 specifically brought this category within the exemption provided under Section 397(1)(c).

TDS Position Before and After 1 October 2026

Therefore, the amendment should not be interpreted as an exemption from TDS.

The correct takeaway is:

From 1 October 2026, a resident Individual or HUF purchasing immovable property from a non-resident can deduct the applicable TDS without obtaining TAN.

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2. Form 141 Gets a New Reporting Framework

Another significant change introduced through the 22 September 2026 notification relates to Form No. 141.

The existing form has been modified so that it now also covers transactions falling under Section 393(2), Table Serial No. 17.

The notification has specifically added this provision to the heading of Form 141.

More importantly, a new section titled:

Schedule E — TDS on Consideration for Transfer of Immovable Property under Section 393(2), Table Serial No. 17

has been incorporated into Form 141.

This new schedule provides the reporting framework for these transactions after the TAN requirement has been removed.

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What Details Must Be Reported in Schedule E?

The newly introduced Schedule E requires detailed information concerning the property, buyers, non-resident sellers and the corresponding TDS transaction.

1. Information About the Property

The buyer will have to provide details such as:

• Complete address of the immovable property
• Nature/type of property

The available property categories include:

• Land other than agricultural land
• Building or a part of a building
• Both land and building

These details form part of the newly prescribed Schedule E.

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2. Information of All Buyers

Schedule E also requires details of every buyer involved in the transaction.

The information includes:

• Serial number
• Buyer’s PAN
• Buyer’s name
• Percentage/proportion of the total consideration payable or credited by each buyer

The total proportion reported for all buyers should add up to 100%.

Example of a Joint Property Purchase

Suppose a husband and wife jointly purchase a property.

The reporting could reflect:

• Husband — 50%
• Wife — 50%

The form therefore captures the PAN and respective share of consideration for each buyer.

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3. Detailed Information About Non-Resident Sellers

Since the transaction involves a non-resident seller, Schedule E requires additional information about each seller/deductee.

The prescribed details include:

• PAN, where available
• Name of the seller
• Status
• Contact number
• Email address
• Foreign residential address
• Tax Residency Certificate number
• Tax Identification Number
• Proportion of the total sale consideration received or debited to each seller

This makes the reporting requirements more detailed than those generally applicable to a standard resident-property TDS transaction.

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PAN Alone Is Not Sufficient for an NRI Seller

One of the important points in the amended Form is contained in Note 6.

The prescribed note clarifies that the contact number, email address and foreign address of the non-resident deductee are mandatory, regardless of whether the non-resident has a PAN.

In cases where the non-resident seller does not have a PAN, the specified details relating to the seller’s Tax Residency Certificate (TRC) and Tax Identification Number (TIN) may also be required in accordance with Rule 217 to determine the applicable rate and avoid higher-rate deduction where the prescribed conditions are satisfied.

Therefore, buyers should not assume that the absence of the seller’s PAN automatically means that TDS can simply be deducted at a higher rate.

The new Schedule E has been specifically structured to collect comprehensive information about the non-resident seller and the applicable tax details.

4. Agreement Date and Registration Date

The newly introduced Schedule E also captures important dates related to the property transaction.

The buyer is required to provide:

• Date of agreement
• Date of registration, wherever applicable or available

These details help establish the sequence and timing of the property transaction for reporting and TDS purposes.

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5. Sale Consideration and Stamp Duty Value

Schedule E specifically requires reporting of two important amounts:

• Total Stamp Duty Value of the property
• Total Sale Consideration relating to the property

These figures are relevant for determining the appropriate tax treatment and TDS liability in transactions involving a non-resident seller.

The transaction cannot simply be treated in the same manner as the standard 1% TDS mechanism applicable to purchases from resident sellers. The applicable provisions for payments to a non-resident have to be examined separately.

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6. Instalment-Based Property Payments Are Also Included

The new Schedule E recognises that the purchase consideration may be paid in multiple instalments rather than in a single payment.

The buyer must specify whether the consideration is being paid:

• In a lump sum, or
• Through instalments

Where payment is made in instalments, the form further requires the buyer to identify whether the payment represents:

• First instalment
• Subsequent instalment
• Final instalment

For a subsequent or final instalment, the acknowledgement number of the earlier filing is also required.

In the case of the final instalment, the form additionally requires the total consideration paid or credited, including the current instalment.

This provision is particularly relevant for NRI property transactions, where the sale consideration may commonly be settled through several payments.

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7. Information Relating to the NRI Seller’s Capital Gains

Schedule E does not merely capture payment-related information. It also seeks specific details concerning the tax treatment of the non-resident seller.

The form requires information such as:

• PAN of the deductee/seller
• Name of the seller
• Whether the seller has opted out of the applicable tax regime under Section 202(1), wherever relevant
• Nature of capital gains arising to the seller

The capital-gain category includes options such as:

• Long-term capital gains
• Short-term capital gains, excluding specified gains

This is important because TDS in a transaction involving an NRI is determined with reference to the amount chargeable to tax and the applicable provisions/rate. It is therefore different from simply applying the standard 1% TDS rule used for specified property purchases from resident sellers.

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8. Detailed TDS Calculation Information

The new Schedule E also provides for reporting of the actual TDS computation.

The relevant fields include:

• Proportionate stamp duty value
• Amount paid or credited through earlier instalments
• Amount paid or credited in the current transaction
• Date of payment or credit
• Amount on which TDS is applicable
• Applicable TDS rate
• Certificate number under Section 395(1), where obtained by the deductee
• Certificate number under Section 395(2), where obtained by the deductor
• TDS amount deducted
• Date of TDS deduction

These requirements indicate that Form 141 is designed as a detailed transaction-level reporting statement, rather than being merely a replacement form after the removal of the TAN requirement.

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What Happens If the NRI Has a Lower or Nil TDS Certificate?

The new reporting framework also takes into account situations where the non-resident seller has obtained a lower or nil deduction certificate.

Schedule E provides a specific field for the certificate number issued under Section 395(1) when the deductee has obtained such a certificate.

It also provides a separate field for the certificate issued under Section 395(2) where the certificate has been obtained by the deductor.

Therefore, the removal of the TAN requirement does not mean that the lower or nil deduction certificate provisions have been discontinued.

The buyer must still determine the applicable TDS after considering the provisions relevant to the non-resident seller and the amount chargeable to tax.

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Payment and Form 141 Compliance Under the Amended Rules

The CBDT notification has also made corresponding amendments to the procedural rules.

Rule 218(3) has been modified to specifically include consideration for the transfer of immovable property covered under Section 393(2), Table Serial No. 17, where the payment or credit is made by a resident Individual or HUF.

A corresponding amendment has also been made to Rule 219(5), which now specifically refers to the same category of transactions.

Therefore, the notification goes beyond simply changing the format of a form. The relevant Rules have also been updated to establish the payment and reporting procedure for these transactions.

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Form 132 Also Covers NRI Property Transactions

CBDT has additionally amended Rule 215(1).

The revised provision now covers TDS deducted under:

Section 393(2), Table Serial No. 17

where a resident Individual or HUF deducts tax from consideration payable for the transfer of immovable property.

As a result, Form No. 132 has also been revised.

The amended form specifically covers transactions involving:

Transfer of immovable property by a non-resident to a resident Individual or Hindu Undivided Family.

Thus, from 1 October 2026, the overall compliance process can be understood as:

TDS deduction → Payment and reporting through Form 141 → TDS certificate through Form 132

The key benefit is that an eligible resident Individual or HUF does not need to obtain TAN merely for carrying out this TDS compliance on the purchase of immovable property from a non-resident.