New TDS compliance requirements for Property Transfers
Income-tax (Fifth Amendment) Rules, 2026 Notified: New TDS Compliance Requirements for Property Transfers by Non-Residents
The Central Board of Direct Taxes (CBDT), under the Ministry of Finance, has notified the Income-tax (Fifth Amendment) Rules, 2026, introducing changes to the prescribed procedures and forms relating to tax deduction at source (TDS) on certain transactions involving the transfer of immovable property by non-residents.
The amendments have been notified through Notification No. 121/2026 dated 22 September 2026 and will come into effect from 1 October 2026.
The amendments primarily update Rules 215, 218 and 219 of the Income-tax Rules, 2026, along with corresponding changes in Forms 132 and 141.
TDS provisions extended to specified property transactions involving non-residents
The amended rules provide procedural requirements for transactions covered under section 393(2) of the Income-tax Act, 2025, where tax is required to be deducted from consideration relating to the transfer of immovable property and the payer is a resident individual or Hindu Undivided Family (HUF).
Accordingly, the relevant compliance mechanism has been incorporated into the rules governing the furnishing of information and TDS-related reporting.
Changes in Rule 215
Rule 215, which deals with prescribed information in specified circumstances, has been amended to specifically include transactions covered under section 393(2).
The amendment covers cases where a resident individual or HUF is required to deduct tax from consideration payable for the transfer of immovable property.
The corresponding entries in the relevant table under Rule 215 have also been revised to accommodate these transactions.
Changes in Rule 218
Rule 218 has been amended to expand the circumstances in which the prescribed information is required to be furnished.
The amendment specifically covers consideration for the transfer of immovable property where:
- the transaction falls within the scope of section 393(2); and
- the consideration is paid or credited by a resident individual or HUF.
This brings such property transactions within the relevant information-reporting framework prescribed under the Income-tax Rules, 2026.
Changes in Rule 219
Further amendments have been made to Rule 219 to incorporate section 393(2) transactions within the prescribed reporting mechanism.
A new clause has been inserted to specifically cover cases where a resident individual or HUF is required to deduct TDS on consideration relating to the transfer of immovable property.
The amendment also makes a consequential correction in sub-rule (8), replacing the earlier reference to sub-section (1) with a reference to sub-section (7).
Form No. 132 revised
Form No. 132 has also been updated.
The form is now linked to the relevant entry under Rule 215 and has been modified to capture additional information concerning certain transactions involving non-residents.
A new transaction category has been added for:
Transfer of immovable property by a non-resident to a resident individual or HUF.
The form also includes revised notes relating to mandatory information and pre-filled particulars.
Major changes in Form No. 141
Form No. 141 has undergone more extensive changes.
The heading of the form has been expanded to include transactions covered under section 393(2) in addition to the specified transactions already covered under section 393(1).
A new category has also been inserted in Part A for:
Transfer of immovable property by a non-resident to a resident individual or HUF.
New Schedule E introduced
A significant change is the introduction of Schedule E, specifically dealing with TDS on consideration for the transfer of immovable property covered under section 393(2).
The new schedule requires detailed transaction-level information.
Information regarding the property
The deductor is required to provide details such as:
- Address of the immovable property;
- Nature of the property, including land, building or both;
- Details of all buyers; and
- Proportion of the total sale consideration payable or creditable by each buyer.
Details of sellers/deductees
The schedule also seeks comprehensive information regarding each seller, including:
- PAN, where available;
- Name;
- Status of the deductee;
- Contact number;
- Email address;
- Address in the country or specified territory of residence;
- Tax Residency Certificate number;
- Tax Identification Number; and
- Proportion of the sale consideration receivable by each seller.
For non-resident sellers, certain additional information is required even where PAN is not available.
Property transaction and payment details
Schedule E requires reporting of important transaction particulars, including:
- Date of agreement;
- Date of registration, where available;
- Total stamp duty value;
- Total sale consideration;
- Whether payment is being made in a lump sum or instalments; and
- Details relating to the relevant instalment.
Where instalments are involved, the form requires information regarding whether the payment represents the first, subsequent or final instalment.
In the case of subsequent or final instalments, details of earlier payments and the total consideration paid or credited are also required.
Capital gains-related information
The revised Form No. 141 requires transaction-specific information concerning the seller.
This includes:
- PAN and name of the seller;
- Whether the seller has opted out of the specified taxation regime under section 202(1), where applicable;
- Nature of capital gains arising to the seller; and
- Relevant amounts attributable to the transaction.
The form also provides for reporting the proportionate stamp duty value, previous instalments, current payment, date of payment or credit, amount subject to TDS and applicable TDS rate.
Details of TDS and certificates
The revised schedule also captures details relating to tax deduction, including:
- Rate of TDS;
- Amount of TDS deducted;
- Date of deduction;
- Certificate number under section 395(1), where obtained by the deductee;
- Certificate number under section 395(2), where obtained by the deductor; and
- Unique acknowledgement number of the corresponding Form No. 145, wherever applicable.
This is particularly relevant where a lower or nil deduction certificate has been obtained under the applicable provisions.
Additional compliance for non-resident sellers
The amended notes to Form No. 141 clarify that certain details of a non-resident deductee are mandatory.
The contact number, email address and overseas residential address are required to be furnished irrespective of whether the non-resident has a PAN.
Where PAN is not available, specified information relating to the deductee’s foreign tax identification and residency is required in accordance with the applicable provisions to ensure that tax is not deducted at the prescribed higher rate merely because of non-availability of PAN.
The form also prescribes status codes for different categories of deductees, including companies, individuals, HUFs, AOPs, co-operative societies, firms and other entities.
Tax Residency Certificate and Tax Identification Number
The revised form specifically requires details relating to the Tax Residency Certificate (TRC) and Tax Identification Number (TIN) of the non-resident seller, wherever applicable.
The TRC refers to the certificate issued by the government of the country or specified territory in which the deductee claims to be resident, subject to the law of that jurisdiction providing for such certification.
Where a TIN is not available, the prescribed alternative identification number issued by the relevant foreign government may be furnished.
TDS amount to include surcharge and cess
The amended instructions clarify that the amount of tax deducted at source is to include surcharge, wherever applicable, as well as health and education cess.
Further, where there is more than one deductor involved in a transaction, each deductor is required to furnish a separate form.
Effective date
The Income-tax (Fifth Amendment) Rules, 2026 will come into force from 1 October 2026.
The amendments are particularly relevant for resident individuals and HUFs purchasing immovable property from non-resident sellers, as the revised rules and forms prescribe additional information and reporting requirements for such transactions.
Key Takeaway
From 1 October 2026, the prescribed TDS reporting framework will specifically capture transactions involving the transfer of immovable property by a non-resident to a resident individual or HUF.
The introduction of Schedule E in Form No. 141 is a key compliance change, as it requires detailed information about the property, buyers, non-resident sellers, consideration, instalments, stamp duty value, capital gains-related particulars, certificates and TDS.
Also Read: SFT – 2517: Depository Transaction Reporting, Due Dates & Key Guidelines
Also Read: “CBDT Notifies New Forms PAN CR-01 & PAN CR-02 for PAN Correction from 1 April 2026”
Also Read: FAQs and Guidance notes on Forms under Income-tax Rules, 2026
Read More: Union Budget 2026 – CA Cult
