Budget 2026 Simplifies Property Purchases from NRIs by Removing TAN Requirement
Buying property from non-resident Indians (NRIs) has long been a complicated and paperwork-heavy process for resident Indian buyers. However, a key proposal in Union Budget 2026 has significantly eased the burden by abolishing the requirement to obtain a Tax Deduction and Collection Account Number (TAN) for such transactions.
According to tax experts, this single regulatory change is expected to make property transactions involving NRIs far more accessible for resident Indians.
PAN-Based TDS Payment Now Allowed
Finance Minister Nirmala Sitharaman announced that resident buyers purchasing property from NRIs can now deduct and deposit tax deducted at source (TDS) using their own Permanent Account Number (PAN) through a resident challan.
Earlier, buyers were required to obtain a TAN to deposit the mandatory 1% TDS applicable on immovable property transactions. This process often proved difficult for individuals, as TANs are generally issued to businesses and corporates.
“One had to obtain a TAN, deposit tax through it, and file a separate TDS return. Most individuals found this challenging and had to rely on tax professionals,” said Karan Batra.
If the NRI seller provides a PAN, TDS is levied at 1%. In the absence of PAN, the rate rises sharply to 20%.
Procedure Streamlined for Resident Buyers
Experts say the revised mechanism eliminates unnecessary compliance steps. Resident Indians can now deposit TDS in the same manner as they do for rental payments and reflect it directly in their income tax returns, without filing an additional TDS return.
“Many buyers realised late in the transaction that TDS compliance was complex and required professional help. With this simplification, Indians can now easily acquire properties owned by NRIs in India,” Batra added.
Relief for Undisclosed Foreign Assets Up to ₹20 Lakh
Budget 2026 has also introduced relief for resident Indians who own foreign movable assets worth up to ₹20 lakh and failed to disclose them in their tax returns. Such individuals will now be protected from prosecution, with the immunity applicable from 1 October 2024.
This relief benefits residents holding foreign employee stock options (ESOPs), overseas bank accounts, or foreign-listed shares. While tax on such assets remains payable, the reporting requirement has been relaxed.
Notably, harsh penalties such as imprisonment will not apply for non-disclosure of foreign assets within the ₹20 lakh limit.
A Boost for Property Transactions
Tax experts believe these changes will encourage smoother property transactions involving NRIs while reducing compliance pressure on individual buyers. The move is expected to improve transparency and boost confidence among resident Indian property purchasers.
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