Buying property from a Non-Resident Indian (NRI) has long been considered a paperwork-heavy process, especially because of complex Tax Deducted at Source (TDS) rules. However, Budget 2026 has brought much-needed relief by simplifying TDS compliance for resident buyers. The move is expected to make NRI property transactions smoother, faster, and less intimidating.
🔍 What Was the Problem Earlier?
Earlier, any resident purchasing property from an NRI was required to:
- Deduct TDS at higher applicable non-resident tax rates
-
Obtain a Tax Deduction and Collection Account Number (TAN) solely for this one transaction
This often discouraged genuine buyers due to procedural delays and compliance confusion.
✅ What Has Budget 2026 Changed?
The Union Budget 2026 proposes a simplified TDS mechanism, removing the requirement for buyers to obtain a separate TAN. Instead, buyers can now deposit TDS using a PAN-based challan, similar to property transactions between resident Indians.
🧾 Key Benefits of the New Rule
- No TAN required for one-time property purchases from NRIs
- Reduced paperwork and compliance burden
- Faster execution of property deals, especially important in resale transactions
- Lower risk of procedural errors and penalties
💰 Important Point: Tax Rates Remain the Same
While the compliance process is simplified, there is no change in the applicable TDS rates. Buyers must still deduct tax at rates applicable to NRIs, including surcharge and cess. NRIs can continue to apply for lower or nil TDS certificates if eligible.
🏢 Why This Matters for the Real Estate Market
Experts believe this move addresses a long-standing anomaly in tax compliance. By removing unnecessary hurdles, Budget 2026:
- Encourages transparent NRI property transactions
- Boosts buyer confidence
- Improves ease of doing business in the real estate sector
📅 When Will This Take Effect?
The proposed change is expected to be implemented from October 1, 2026, following amendments to the Income Tax Act.
🌍 A Win-Win for Buyers and NRI Sellers
With many NRIs selling properties remotely or through power of attorney, this reform simplifies execution on both ends. Buyers benefit from easier compliance, while NRI sellers experience smoother and quicker deal closures.
🏠 Buying Property from an NRI? Budget 2026 Makes TDS Compliance Easier