CBDT brings TDS on property bought from non-residents under Form 141
Key points
- CBDT Notification No. 121/2026 adds TDS on property bought from a non-resident to the Form No. 141 challan-cum-statement and Form No. 132 certificate rules.
- It covers resident individuals and Hindu undivided families who deduct tax under section 393(2) when buying immovable property from a non-resident seller.
- The amended rules apply from 1 October 2026, and Form No. 141 now has a new Schedule E for these purchases.
The Central Board of Direct Taxes (CBDT) has notified the Income-tax (Fifth Amendment) Rules, 2026, which change how a resident individual or Hindu undivided family (HUF) buying immovable property from a non-resident deposits and reports the tax deducted at source (TDS). The rules were issued as Notification No. 121/2026 dated 22 September 2026 and come into force on 1 October 2026.
What has changed
The notification amends rules 215, 218 and 219 of the Income-tax Rules, 2026 and Forms No. 132 and 141. It adds deduction under section 393(2) [Table: Sl. No. 17] of the Income-tax Act, 2025, where a resident individual or HUF deducts tax on the consideration for transfer of immovable property, to provisions that already covered four kinds of deduction under section 393(1).
| Provision | Change from 1 October 2026 |
|---|---|
| Rule 215(1), Table serial number 3 | The TDS certificate in Form No. 132 now also covers these property purchases |
| Rule 218(3) | Now applies to sums deducted under section 393(1) and (2), and adds consideration for immovable property paid or credited by a resident individual or HUF |
| Rule 219(5) | Adds section 393(2) [Table Sl. No. 17] where a resident individual or HUF deducts tax on transfer of immovable property |
| Form No. 132 | Adds the option “Transfer of immovable property by a non-resident to a resident individual or Hindu undivided family” |
| Form No. 141 | Adds Schedule E for TDS on these transfers |
Under the Income-tax Rules, 2026 as notified on 20 March 2026, rules 218(3) and 219(5) require the tax to be paid, with a challan-cum-statement in Form No. 141, within thirty days from the end of the month in which it is deducted. Rule 215 makes the Form No. 132 certificate due within fifteen days from the due date of Form No. 141. In practice, this puts purchases from non-residents on the same route already used for TDS on rent, property purchases covered by section 393(1), certain contract, professional fee and commission payments, and virtual digital assets.
The new Schedule E asks for the property’s address and type; the PAN, name and share of each buyer; and, for each seller, the PAN if available, name, status, contact number, email, overseas address, tax residency certificate number, tax identification number and share. It also asks for the dates of agreement and registration, stamp duty value, total sale consideration, whether payment is in a lump sum or instalments, the type of capital gains, the TDS rate, any certificate number under section 395(1) or 395(2), the tax deducted and the acknowledgement number of the corresponding Form No. 145, if applicable.
The notes say the seller’s contact number, email and overseas address are mandatory whether or not the seller has a PAN. Without a PAN, the details under rule 217 must be given to ensure tax is not deducted at a higher rate. Tax deducted includes surcharge and cess, and where there is more than one deductor, each must file a separate form.
Who is affected
Resident individuals and HUFs who buy immovable property from a non-resident. Schedule E lists the property types as land (other than agricultural land), a building or part of a building, or both. The amendments do not mention companies, firms or other buyers.
What this means for businesses
This mainly matters to founders, executives and families buying property personally from non-residents. The notification does not mention a tax deduction and collection account number (TAN) and does not say how deductions made before 1 October 2026 are to be reported. Buyers should confirm these points and the TDS rate with an adviser.
What to do now
- For purchases from a non-resident, collect the seller’s PAN or, if there is none, the tax residency certificate and tax identification number, along with a contact number, email and overseas address.
- Plan to deposit TDS with Form No. 141 within thirty days from the end of the month of deduction.
- Track instalments: Schedule E asks for earlier acknowledgement numbers on later instalments.
- Issue the Form No. 132 certificate to the seller within fifteen days from the Form No. 141 due date.
Source: CBDT Notification No. 121/2026.
This update was written with AI from the official source above and automatically fact-checked against it before publishing. It is general information, not professional advice. Check the source, or talk to a Chartered Accountant, before acting on it.