If you are a resident individual or Hindu Undivided Family (HUF) buying immovable property from a non-resident, you have to deduct tax at source (TDS) on the price. CBDT has updated the rules and forms for depositing and reporting that TDS.
The changes are in the Income-tax (Fifth Amendment) Rules, 2026 (Notification No. 121/2026 dated 22 September 2026) under the Income-tax Act, 2025, and apply from 1 October 2026.
What changed
The amended rules specifically cover deduction under section 393(2) [Table: Sl. No. 17], where a resident individual or HUF deducts TDS on consideration for transferring immovable property bought from a non-resident. In particular:
- Rule 215(1) lists this deduction alongside the existing categories that use a challan-cum-statement.
- Rules 218(3) and 219 now name this transaction expressly, so the deduction is reported correctly.
- Form No. 132 adds the transaction type "Transfer of immovable property by a non-resident to a resident individual or Hindu undivided family".
- Form No. 141's heading now covers deductions under section 393(2) [Table: Sl. No. 17], along with the existing section 393(1) categories.
The forms also note that some information will be pre-filled where possible, and that the deductee's details become mandatory when the deductee is a resident.
Why it matters
Buyers from NRIs are often individuals who don't have a TAN and rarely deal with TDS. Dedicated entries in the challan-cum-statement forms make the deduction easier to report correctly, and the NRI seller gets proper credit for the tax.
What you should do
- Before paying, confirm the seller's residential status. TDS on purchases from non-residents works differently from purchases from residents.
- Work out the TDS correctly; your CA can help with the rate and any lower-deduction certificate the seller holds.
- Deposit and report it using the updated forms for payments on or after 1 October 2026.
- Give the seller the TDS certificate so they can claim the credit.
