If you have bought a property from an NRI, or even just thought about it, you probably know that it involves a lot of extra forms and tax rules. In the Union Budget 2026, the Centre has made one big part of this process easier: Buyers can pay this TDS using a normal PAN-based challan, and they do not need to apply for a separate TAN number just. when purchasing a property valued at over ₹50 lakh. This may look like a small change on paper, but it can save a lot of time, effort, and stress for regular homebuyers.
What was the old process and why was it complicated?
To see why this change is so helpful, let’s first look at how buying property from NRIs used to work before.
When an Indian resident wanted to buy a property worth more than ₹50 lakh from an NRI seller, the tax rules made the buyer responsible for collecting and paying tax on the seller’s behalf. The idea was to make sure the government got its share of tax from the NRI’s property sale. But in practice, it puts a heavy load on the buyer.
The buyer had to get a special number called a Tax Deduction Account Number, or TAN. This TAN was just for deducting and paying taxes like this. For most people buying a home, this is a once-in-a-lifetime purchase. Still, they had to go through a lot of government paperwork—filling forms, submitting documents, and waiting for approval from tax offices resulting in delays and headaches.
Let’s consider an example. Suppose you, a resident of Mumbai, decide to purchase a flat worth ₹1.5 crore from your cousin who is an NRI working in Dubai. Under the old rules, you would need to:
- Apply for a TAN from the Income Tax Department
- Wait for approval and receive your TAN
- Use this TAN to file the TDS challan
- Submit the challan with the required documentation
- Finally, after all these steps, complete your property transaction
This administrative maze was especially frustrating because you were not a business or a regular property dealer.
Also Read: Budget 2026 for NRIs: Higher equity investment limits and simplified property tax rules announced
Budget 2026 makes buying properties from NRIs simple
Under the new Budget proposal, the entire process becomes significantly simpler. Buyers can now deposit TDS using a PAN-based challan,which means there’s no longer need to have TAN.
Using our earlier example, if you purchase that ₹1.5 crore flat from your NRI cousin, here’s what you now do:
- You calculate the TDS amount based on the applicable rate (20% of the sale consideration, unless your seller has a lower deduction certificate)
- You prepare a TDS challan using your existing PAN
- You deposit the TDS amount through this challan
- File the return alongwith submission of documents and Challan details
No separate TAN application. The process is now as straightforward as filing your regular income tax forms.
The beauty of this reform lies in aligning NRI property transactions with the system already used for resident-to-resident property purchases. When you buy property from another resident Indian, the TDS requirement exists, but it has always been manageable through PAN-based challans. Now, transactions with NRI sellers follow the same simplified path.
What you should know while buying a property from NRIs after Budget
It’s important to know that this new rule is just about making paperwork easier. The government hasn’t made tax rules any looser—it has only removed some unnecessary steps.
The TDS rates under Section 195 of the Income Tax Act are exactly the same as before. When your NRI seller is selling the property, you still have to deduct TDS at the usual rate—normally 20% of the full sale price. This rate hasn’t changed at all with the Budget.
But if your NRI seller gets a special certificate called Form 13 that allows lower or no TDS, then your tax deduction can be reduced or removed. This option was available before and still is now. You as the buyer still need to check if the seller has this certificate.
CA Parag Jain, Tax Head, 1 Finance, explained:
- TDS rates under Section 195 remain unchanged
- TDS is still applicable on the full sale consideration unless the NRI seller obtains a lower or nil deduction certificate (Form 13)
- All existing safeguards for tax collection continue to apply
Why this change makes a real difference
Making TDS easier for property buys from NRIs solves several everyday problems that regular homebuyers face.
First, it removes a big paperwork obstacle. Many honest buyers put off their property purchase or even dropped it halfway because getting a TAN was surprisingly difficult.
Second, it speeds up the entire deal a lot. Buying property in India already means dealing with many approvals, registrations, and checks. By removing the TAN step, the Budget cuts weeks from the process, making everything quicker and more certain.
Third, it lowers the chance of legal trouble and fines. In the old system, many sincere buyers made small technical mistakes just because things were so complicated. Some filled TAN forms wrong, others missed deadlines, or simply didn’t understand all the rules. These honest errors could lead to tax penalties, fights with tax authorities, or even court cases. The simpler PAN method cuts down on these mistakes and the headaches that follow.
The bottom line for property buyers
In conclusion, buying property from NRIs or residents is now equally simple. For deals over ₹50 lakh, just use your regular PAN challan to deposit TDS—no TAN, no extra approvals needed. The tax rules stay the same, but the hassle is gone. This Budget change means smoother deals, less worry, and real relief for millions of homebuyers.
