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Buying property from NRIs? Worried about getting a tan? Not anymore. To ease the burden of compliance, the Budget proposed that resident individuals and NRIs do not need a Tax Deduction and Collection Account Number (TAN) if they are purchasing a property from a Non-Resident Indian (NRI).
The amendment will come into effect from October 1, 2026.Under the proposed framework, resident individuals or HUF can report tax deducted at source (TDS) by quoting PAN, as happens when transactions are between two residents. At present, if someone buys immovable property from a resident seller, the person is not required to obtain a TAN to deduct the tax at source. However, when the seller of immovable property is a non-resident, the buyer must obtain a TAN to deduct the tax at source.
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Amit Patel, partner at Manohar Chowdhry & Associates, said this was an elaborate process. “At present, if an assessee purchases an immovable property from an NRI, there is no separate relaxation with regard to compliance with TDS responsibilities. As a result, in such cases, the buyer needs to obtain a TAN, register on the portal, then deduct TDS u/s.195, and make payment to the government. Under Section 195, as with all other regular TDS sections, a quarterly TDS statement is required,” he said.
The buyer will need professional help with all of this.Henesh Doshi, California, welcomed the move. “There has been an unnecessary compliance burden because of this. While the process of getting a TAN is simple, people are used to getting a TAN for just one transaction. So, this is a good relief.”
