NRI taxes: Budget 2026 proposes simplification of TDS process for inland property sales

The government has proposed a key simplification in property transactions involving non-residents by allowing resident buyers to deduct and deposit TDS using a PAN-based challan, removing the requirement to obtain a separate Tax Deduction and Collection Account Number (TAN). The change is aimed at easing compliance and reducing procedural hurdles in such transactions.

Rajarshi Dasgupta, Executive Director – Tax at AQUILAW, said the proposal is a welcome rationalisation of the compliance framework. “Permitting resident buyers to deduct and deposit TDS on property purchases from non-resident sellers through a PAN-based challan addresses a long-standing pain point. The earlier requirement of obtaining a TAN for what is often a one-time transaction led to delays and confusion. This move aligns non-resident property transactions with those involving resident sellers, improves ease of compliance and significantly cuts administrative friction without compromising tax oversight,” he said.

FM Sitharaman also proposed a six-month disclosure window for small taxpayers—such as students, technology professionals and relocated NRIs—to voluntarily declare foreign assets and regularise their tax compliance.