Buying a flat from an NRI? From 1 October 2026 you can pay the TDS through Form 141 challan-cum-statement

If you are a resident individual or Hindu undivided family (HUF) buying a flat, plot or house from a non-resident Indian, the way you deposit the tax you withhold changed on 1 October 2026. CBDT Notification No. 121/2026, published as G.S.R. 830(E) on 22 September 2026, brings these purchases into the simple challan-cum-statement route in Form No. 141. Until now, that route was available for rent, purchases from resident sellers, contract and professional fees and virtual digital asset transfers. This tip explains what changed, who it applies to, and how to fill the new Schedule E without tripping the validations.

The amendment is the Income-tax (Fifth Amendment) Rules, 2026. It was issued under section 533 read with sections 395(4)(a) and 397(3) of the Income-tax Act, 2025, and it amends rules 215(1), 218(3) and 219(5) of the Income-tax Rules, 2026. The full text is on the Income Tax Department portal.

What the Section Says

Section 393(2) of the Income-tax Act, 2025 deals with tax deduction at source on payments to non-residents. Serial No. 17 of its Table covers consideration for the transfer of any immovable property. In plain English: when you pay a non-resident for a property, you must deduct TDS before the money leaves your hands. The 2026 notification does not change that obligation. It changes the paperwork for one class of buyer, resident individuals and HUFs, from 1 October 2026.

Under the amended rule 218(3), such a buyer pays the tax deducted within 30 days from the end of the month in which it was deducted. The payment goes with a challan-cum-statement in Form No. 141. The same rule already allowed this for four other categories, which are set out below.

Three rules move together in Notification No. 121/2026:

1. Rule 215(1) is amended so the 30-day, Form 141 timeline covers Sl. No. 17 purchases by resident individuals and HUFs.
2. Rule 218(3) is amended so the challan-cum-statement replaces the separate deposit-and-return cycle for these purchases.
3. Rule 219(5) is amended in line with the other two, so the reporting rules match the Form 141 route for these purchases.

Form No. 141 also gets a new Schedule E, built only for non-resident property sales. Form No. 132 gets a new entry: "Transfer of immovable property by a non-resident to a resident individual or Hindu undivided family". The briefing from the notification lists the Schedule E fields as follows.

Worked Example

Take a resident couple in Pune, Meera and Arjun, buying a two-bedroom flat for Rs 1,20,00,000 from Rahul, a non-resident who has lived in Dubai since 2019. They will own the flat 60:40. The agreement is signed on 3 November 2026 and the sale deed is registered on 14 November 2026. The stamp duty value on the registration receipt is Rs 1,26,00,000. Rahul holds a PAN and has owned the flat since 2015, so the gain is long-term.

Step 1: Split the consideration by share. Note 11 to Form 141 says that where there is more than one buyer, each deductor files a separate form. Meera and Arjun therefore each file their own Form 141.

Step 2: Work out the tax to withhold. Each buyer deducts tax on their own payment at the rate that applies under section 393(2), plus surcharge and cess. This article does not give the rates; Notification No. 121/2026 deals only with procedure. Use the TDS calculator to estimate the amount. If Rahul has a lower-deduction certificate under section 395(1), each buyer quotes its number in Schedule E and deducts at the certificate rate.

Step 3: Find the deadline. Both payments are made and the tax deducted on 14 November 2026. The month of deduction ends on 30 November 2026, so the 30-day window under rule 218(3) runs to 30 December 2026. If the price were paid in two instalments, say Rs 60,00,000 on 14 November 2026 and Rs 60,00,000 on 5 January 2027, each instalment would have its own deadline: 30 December 2026 for the first and 2 March 2027 for the second (30 days after 31 January 2027). The second form would quote the acknowledgement number from the first.

Step 4: Report the capital gain correctly. Rahul has owned the flat since 2015, more than 11 years before the 2026 sale, so each buyer ticks LTCG in Schedule E. Getting the LTCG versus STCG choice wrong is one of the more common filing errors. Rahul can estimate his own liability with the capital gains calculator and the NRI tax calculator.

Common Mistakes

1. One Form 141 for two buyers. Note 11 is clear that each deductor files separately. In the example above, a single form from Meera covering the full Rs 1.2 crore would leave Arjun's Rs 48 lakh share unreported.

2. Leaving out the seller's overseas contact details. In Schedule E, the seller's phone number, email and address in the country of residence are mandatory even where the seller has a PAN. If Rahul supplies only his Indian address, the form is incomplete.

3. No PAN, no TRC, no TIN. Under rule 217 of the Income-tax Rules, 2026, a non-resident without a PAN must supply a tax residency certificate number and tax identification number. Without them, the higher-rate deduction applies. Collect these documents before the agreement date, not after registration.

4. Using the stamp duty value as the consideration. Schedule E asks for the stamp duty value and the sale consideration as separate fields. In the example they differ by Rs 6,00,000 (Rs 1,26,00,000 against Rs 1,20,00,000). Do not merge them into one figure.

5. Missing the 30-day window. The 30 days run from the end of the month of deduction, not from the date of deduction. A buyer who deducts on 2 November 2026 has until 30 December 2026, not until 2 December 2026. A buyer who deducts on 30 November 2026 also has until 30 December 2026.

6. Assuming the route applies to every buyer. The amendment covers resident individuals and HUFs only. A company or firm buying from a non-resident is outside rule 218(3) as amended on 22 September 2026, and should check its own compliance route with its tax adviser.

7. Forgetting the lower-deduction certificate field. If the seller obtained a certificate under section 395(1), or the buyer obtained one under section 395(2), its number goes into Schedule E. Without the number, a deduction at the certificate rate in a 2026 filing has nothing on record to support it.

8. Ignoring the Form 145 cross-reference. Where a corresponding Form No. 145 has been filed, Schedule E asks for its UAN. Leaving the field blank when a Form 145 exists breaks the link between the two filings.

The underlying rules are on indiacode.nic.in for the Income-tax Act, 2025, and in the notification archive at incometax.gov.in. Older guidance under section 195 of the Income-tax Act, 1961 covers payments made before the 2025 Act took effect. For residential status, the test in the year of payment decides whether Rahul is a non-resident at all.

FAQ

From what date can I use Form 141 to pay TDS on a property bought from an NRI?

From 1 October 2026, the date the Income-tax (Fifth Amendment) Rules, 2026 came into force under CBDT Notification No. 121/2026 dated 22 September 2026.

Who can use the Form 141 route for a non-resident seller?

Only a resident individual or HUF deducting tax under section 393(2), Table Sl. No. 17, of the Income-tax Act, 2025 on consideration for the transfer of immovable property.

What is the deadline for paying the TDS?

Within 30 days from the end of the month in which the tax was deducted. Tax deducted on any date in November 2026 is due by 30 December 2026.

We are three co-buyers. Do we file one form or three?

Three. Note 11 to Form No. 141 requires each deductor to file a separate form where there is more than one buyer, each showing that buyer's own share.

The seller has no PAN. What do I need from them?

A tax residency certificate number and a tax identification number, required under rule 217 to avoid the higher-rate deduction. You also need their phone number, email and overseas address, which are mandatory in every case.

Does this notification change the TDS rate on property bought from an NRI?

No. Notification No. 121/2026 amends rules 215(1), 218(3) and 219(5) and the forms only. It does not change the rate of deduction under section 393(2).

I am paying in instalments. Is it one Form 141 or several?

Schedule E records whether the consideration is paid as a lump sum or in instalments. For each later instalment, you quote the acknowledgement numbers of the earlier forms, so every deduction gets its own Form 141 and its own 30-day deadline.

This article is general information based on CBDT Notification No. 121/2026 and is not tax advice. Check the notified forms on the e-filing portal before you file.