If you're an NRI planning to sell property in India, there's an important date to remember: October 1, 2026.
Right now, when an NRI sells property in India, the buyer (usually a resident Indian) has to deduct tax before paying the seller, this is called TDS. To do this, the buyer currently needs a special tax number called a TAN. Getting a TAN involves paperwork and delays, and many buyers find it a hassle. Because of this, some buyers have hesitated to purchase property from NRIs altogether, or used it as leverage to negotiate discounts.
Budget 2026 removes this hurdle. From October 1, 2026, a resident individual or HUF (Hindu Undivided Family) buying property from an NRI can deduct and deposit the tax using just their PAN, the same simple process used when buying from any other resident Indian. No TAN, no separate quarterly filing.
What This Means for You
Until September 30, 2026: The old rule still applies. Buyers need a TAN to complete the deduction and payment process. If your buyer doesn't have one, the deal can't go through under the current rules.
From October 1, 2026: Individual and HUF buyers no longer need a TAN. They can use their PAN instead, making the transaction faster and less intimidating for them.
One exception: This relief is only for individual and HUF buyers. Company and firm buyers will still need a TAN even after October 1, 2026.
Why It Matters
This change doesn't reduce how much tax is deducted. The TDS rates and your responsibility to pay capital gains tax stay exactly the same. What it does is remove a paperwork barrier that made buyers nervous about purchasing from NRIs. In practice, that should mean:
Faster deals, since buyers won't need to wait on a TAN application
Fewer buyers backing out or demanding discounts over compliance worries
A smoother, more competitive market for NRI-owned properties
Conclusion
This is a welcome, if narrow, reform. It doesn't change how much tax gets deducted or what NRIs owe on their capital gains but it simply removes a paperwork step that has long discouraged resident buyers from purchasing NRI-owned property. From October 1, 2026, individual and HUF buyers can pay TDS using their existing PAN instead of applying for a TAN. Until then, the old TAN-based process remains mandatory, so deals signed before that date still need it. Company and firm buyers are unaffected — they'll still need a TAN regardless. For NRIs, the real gain is a smoother sale process and fewer hesitant buyers.
