CBDT simplifies TDS compliance for property purchases from non-residents; new Form 141, Schedule E from October 1

The Central Board of Direct Taxes (CBDT) has introduced a simplified TDS compliance framework for resident individuals and Hindu Undivided Families (HUFs) purchasing immovable property from non-resident sellers. The changes will come into effect from October 1, 2026, under the Income-tax (Fifth Amendment) Rules, 2026.

The notification, issued on September 22, amends the Income-tax Rules, 2026 and specifically brings transactions covered under section 393(2), Table Serial No. 17, within the relevant TDS reporting framework. The provision applies where a resident individual or HUF is required to deduct tax at source on consideration paid for the transfer of immovable property.

A key change is the expansion of Form No. 141 to cover property transactions in which a non-resident transfers immovable property to a resident individual or HUF. The notification adds this transaction category to the form and also inserts a new Schedule E specifically for TDS on consideration for the transfer of immovable property covered under section 393(2).

MUST READ: HUF tax planning: Why choosing the new regime could cost you deductions in 2026-27

The new Schedule E requires detailed information about the transaction. This includes the property address, type of property, details of all buyers and sellers, PAN where available, seller status, contact details, email ID and overseas address. It also requires information relating to the seller's tax residency certificate and tax identification number.

The form also captures important transaction-level details such as the date of agreement, registration date, stamp duty value, total sale consideration and whether the payment is being made in a lump sum or instalments. For instalment-based transactions, buyers must indicate whether the payment is the first, subsequent or final instalment and, where applicable, provide the previous acknowledgement number.

ALSO READ: Tax filing 2026: Missed crypto income in ITR? Why investors could receive an Income Tax notice

For each non-resident seller, Schedule E requires details including the amount paid or credited, date of payment, amount on which TDS is liable to be deducted, applicable TDS rate and the amount of tax deducted. It also provides for reporting certificate numbers where certificates under the relevant provisions have been obtained.

The notification also lays down additional requirements where the non-resident seller does not have a PAN. The seller's contact number, email ID and overseas address must be provided, while tax residency and identification details are required to help determine the applicable rate of TDS.

The CBDT has also clarified that where there is more than one deductor, each deductor must file a separate form. Some information in the form will be pre-filled to the extent possible, while amounts are generally required to be reported in rupees.

The changes are part of the Income-tax (Fifth Amendment) Rules, 2026 and will take effect from October 1, 2026.

DO READ: How different assets are taxed: A look at capital gains rules across investments