The Budget 2026-2027 has reduced the burden to acquire TAN Number by the buyer (i.e Resident Individual or HUF) on purchase of immovable property from a Non Resident.
Previously Resident Individual or HUF were required to apply for TAN while dealing with a Non Resident the same the deduction now shall be reported by quoting the PAN in same manner as transaction of similar nature between two residents.
For now, there is no change in the mode of TDS payment. The resident buyer is required to mandatorily obtain and use a TAN for depositing TDS until September 30, 2026. The relaxation allowing PAN-based payment without TAN, introduced through the Finance Act, 2026, is prospective and will only come into force from October 1, 2026.
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Effective Date
The relaxation allowing PAN-based payment without TAN comes into force only from October 1, 2026.
Accordingly, TDS must be deducted at the time of payment or credit, whichever is earlier, and deposited through the TAN route using Section Code 1052.
The transaction entered after 1st of October must then be reported in Form 144, which will replaces the earlier Form 27Q and the TDS certificate should be issued in Form 131, similar to the erstwhile Form 16A.
From 1 October 2026, the process is expected to become much simpler because the changes made in the budget would be effective and the government will move from PAN-based TDS deposit and Return Filing mechanism.
This means buyers won’t need to apply and deal with TAN for one-off transactions like a property purchase from an NRI. Instead, they will be able to deposit TDS directly using their PAN, similar to how it currently works for resident sellers. For most individual buyers, this will come as a real relief, as they will no longer be required to obtain a TAN just for the limited purpose of depositing TDS in such cases.
Tax payers are assuming that PAN based payment is already live: Many buyers are attempting to use the proposed PAN-based challan-cum-statement), assuming that the amendment introduced by the Finance Act, 2026 is already effective.
However, this is incorrect. The provision will come into force only from 1 October 2026, not April 2026.
Compliance Risk
Using the wrong section / incorrect challan may can lead to short deduction or unwanted complications of tax and potential exposure to being treated as an assessee-in-default.
Do consider the period of your transaction before deciding the Applicability of PAN-TAN.
Disclaimer: This article is intended for general information only and reflects the law as it stands on the date of publication. It does not constitute tax or legal advice. Readers are advised to consult qualified Chartered Accountants and tax advisors before taking any decisions on the matters discussed.