No More TAN to Buy Your Flat: The 2026 Change That Makes NRI Property Easier to Sell
By Gagandeep SinghUpdated Editorial standards
The deal had been agreed for three weeks. A retired couple in Pune wanted our client's flat, the price was settled, the lawyers were drafting. Then, on a Tuesday evening, our client — a software engineer in Reading — forwarded us a panicked message from the buyer's son: "Our lawyer says because you are an NRI, we have to get something called a TAN before we can pay you, and file a special return. My parents are 70. They don't want this headache. Can we just find another flat?"
That is how NRI property deals have quietly died for years. Not over price, not over the property — over a piece of buyer-side tax bureaucracy that scared off ordinary families the moment their lawyer explained it. The seller, sitting in the UK, never even sees the conversation that loses them the sale.
This is the post about the 2026 change that finally fixes that friction. From 1 October 2026, an individual buyer purchasing immovable property from an NRI can deposit your sale TDS using their own PAN and a simple challan, instead of first obtaining a TAN. It sounds like a dull procedural footnote. In practice, it is one of the most seller-friendly changes in years — because it removes the single most common reason a nervous buyer backs out of an NRI deal.
We will be precise about what this does and does not change. It is not a tax cut. The companion to this post — our NRI selling property in India 2026 TDS guide — covers the core deduction mechanics (the rate, the gross-value problem, the Form 13 certificate) in full, and you should read it alongside this one. This post is about the buyer's experience and what the TAN change means for your ability to actually close a sale. The one constant across both: none of it works without your own valid PAN.
First, what a TAN even is — and why buyers hated it
When you sell property as an NRI, the buyer is legally obliged to deduct tax at source from what they pay you and hand it to the Indian government on your behalf. That part is not new and is not going away.
What was painful is the machinery the buyer needed to do it. Historically, to deposit TDS on a non-resident's sale, the buyer had to:
- Apply for and obtain a TAN — a Tax Deduction and Collection Account Number, a separate identifier distinct from their PAN.
- Deposit the TDS under that TAN.
- File a Form 27Q return reporting the deduction.
For a corporate buyer with an accounts department, this is routine. For a retired couple buying their last home, or a young family buying their first, it is alien, intimidating paperwork that their own conveyancing lawyer flags as a complication. We have lost count of the deals where the buyer's first reaction to "the seller is an NRI" was not about the property at all — it was "this is going to be complicated, let's look at something else."
You, the NRI seller, never needed a TAN yourself — it was always the buyer's burden. But it was your sale that became harder to complete, because a meaningful slice of buyers quietly preferred a resident-owned property they could buy with a simple 1 percent deduction and no extra registration. The friction sat with the buyer; the lost sale landed on you.
What changes from 1 October 2026
Here is the substance. From 1 October 2026 (an effective date we are taking from trade and professional sources — please confirm it against the actual CBDT notification before you rely on it), an individual or HUF buyer making a one-off purchase from an NRI can deposit your TDS using their PAN and a challan-cum-statement, rather than first obtaining a TAN.
In plain terms: buying from an NRI starts to look much more like the ordinary resident-to-resident process the buyer's lawyer already understands. No separate TAN registration. No Form 27Q. Just a PAN-based challan, which is the kind of thing the buyer's side handles routinely.
The seller-facing benefit is not subtle. The single most common objection to buying NRI property — "it's a hassle, the tax paperwork is different" — largely evaporates for the ordinary individual buyer who makes up the bulk of the residential market.
When you list or negotiate, you can now honestly reassure a hesitant individual buyer: from October 2026 they do not need a TAN, and depositing the TDS is a straightforward PAN challan, much like any other purchase. Removing their fear early can be the difference between a buyer who proceeds and one who drifts towards a resident-owned flat. It is a genuine marketing advantage — use it.
Two honest caveats the headlines drop
We are deliberately not overselling this, because two limits matter:
- It is for individual and HUF buyers, not companies. A developer, a firm, or any non-individual purchaser is still expected to use the TAN-and-Form-27Q route. If your buyer is corporate, the old complexity remains for them.
- Timing matters around the cut-over. If your sale to an individual completes before the change takes effect, the buyer is still in the older TAN world. Confirm the exact in-force date before promising a buyer they can skip the TAN.
Here is the before-and-after, side by side.
| Before (or company buyer) | From 1 Oct 2026 (individual buyer) | |
|---|---|---|
| Buyer needs a TAN | Yes | No, PAN is enough |
| Return to file | Form 27Q | Challan-cum-statement on PAN |
| Buyer's admin burden | High and off-putting | Low and familiar |
| Your TDS rate and base | Unchanged | Unchanged |
| Your need for a lower-TDS certificate | Same | Same |
The trap: a simpler deposit is not a smaller deduction
This is where sellers get a costly wrong idea, so we will say it bluntly. The PAN-not-TAN change makes the buyer's deposit easier. It does nothing to how much is deducted from you.
By default, TDS on a long-term NRI property sale is still around 20 percent (under the older long-term regime) plus surcharge and cess — and, crucially, it is computed on your gross sale value, not just your actual gain. On a flat you bought two decades ago that has merely doubled, that deduction can be many times your real tax liability, with the surplus locked at the tax department until you file a return and claim it back.
Do not let "no more TAN, it's simpler now" lull you into thinking the deduction shrank. It did not. Without a lower or nil TDS certificate, the buyer still deducts the non-resident rate on your whole sale price. The simpler deposit route does not put a single extra rupee in your pocket — the lower-TDS certificate does. We walk through the rate, the surcharge layering and the gross-value problem in detail in our NRI selling property TDS guide.
Your real lever stays the same: the lower-TDS certificate
Because the deduction is on gross value by default, the one thing that genuinely reduces the cash withheld from you is a lower or nil TDS certificate, applied for by you (the seller) under Section 197 using Form 13. If granted, it instructs the buyer to deduct only on your actual computed gain rather than the full sale price.
The 2026 capital-gains rules also cap the headline Section 54 / 54F reinvestment exemption at ₹10 crore, which matters if you are rolling proceeds into another Indian property or specified bonds — worth a conversation with your chartered accountant if your numbers are large.
A few practicalities, because sequence is everything:
- The certificate is applied for online and processed by your Jurisdictional Assessing Officer.
- It typically takes several weeks — apply early, well before completion.
- It must be in the buyer's hands before they pay you substantial consideration, or the buyer deducts at the full rate and you are back to reclaiming via a refund.
Whether your buyer uses a TAN or the new PAN challan, your Form 13 lower-TDS certificate works exactly the same way. The two are independent: one is about how the buyer deposits, the other about how much they deduct. Sort the certificate on its own timeline regardless of which deposit route your buyer is on.
Why your own PAN is still step zero
Here is the point sellers underestimate precisely because the buyer's side just got easier: your PAN is more central than ever.
The buyer — TAN or PAN challan, it makes no difference — deposits the TDS against your PAN. If you do not hold a valid PAN, or it shows the wrong status, the consequences land on you:
- The TDS credit cannot attach cleanly to you, so claiming it (or a refund) at return time becomes a fight.
- A Form 13 lower-TDS application is filed on your PAN — no PAN, no certificate, no relief from the gross-value deduction.
- A PAN flagged inoperative, or still listing you as Resident when you are actually an NRI, can trigger a higher deduction and refund delays.
NRIs and OCIs are generally exempt from PAN-Aadhaar linking, but the income-tax database can still carry stale Resident status from years ago. That is exactly the kind of quiet mismatch that surfaces at the worst possible moment — mid-sale, with a nervous buyer watching. Getting a correctly-issued PAN that shows Non-Resident status is the foundation the whole sale rests on, which is why we treat the NRI PAN card service as step zero of every property-sale conversation.
Selling your Indian property from the UK in 2026, in order
- Fix your PAN first — confirm you hold a valid, operative PAN showing Non-Resident status. Everything downstream depends on it.
- Establish your true gain — gather proof of original cost and improvement costs so your actual capital gain can be computed.
- Decide on a lower-TDS certificate — if the gross-value deduction dwarfs your real tax, file Form 13 early and budget several weeks.
- Brief the buyer on the new deposit route — individual buyers can use a PAN challan from October 2026; companies still need a TAN.
- Complete and collect the evidence — keep the deduction details and challan for your return.
- File your Indian return — claim the TDS credit, settle the final liability, and recover any excess as a refund.
How this sits alongside your other Indian property paperwork
If you are selling, you may also be navigating the wider web of NRI property and identity admin. The same PAN-and-status foundation recurs everywhere: if you are buying as well as selling, our guide to buying property in India as an OCI or NRI shows where the deduction rules flip; and if the property came to you through a family estate, inheriting property in India as an NRI covers the documentation and PAN housekeeping that has to be in place before you can sell it on.
For the full mechanics of applications, corrections, and status updates, our NRI PAN card 2026 guide walks through the whole identity layer end to end.
DIY or get help — the honest call
We will be straight, because the answer genuinely splits.
Where DIY works well: if you already hold a valid PAN with correct Non-Resident status, your gain is modest and easy to compute, and your buyer is an ordinary individual using the new PAN challan route, much of this is manageable from the UK with a cooperative buyer's lawyer. The 2026 change has, for once, made part of the process simpler rather than harder.
Where it earns its fee: the lower-TDS certificate, repatriating sale proceeds out of India, and computing the gain across the regime and indexation nuances are firmly chartered-accountant territory. A good CA in India is worth far more than they charge on a transaction this size, and we will tell you so rather than pretend otherwise.
Where we fit: NriDirect's lane is the identity layer — making sure your PAN exists, is operative, and shows Non-Resident status before any of that begins. Get that wrong and even the best CA, and the friendliest buyer, are blocked. If your PAN is missing, dormant, or wrongly flagged, that is the problem we fix every week, and it is almost always the right first move.
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Our Reading client's deal, for the record, did not die. We had already sorted his PAN months earlier, so when the buyer's son panicked, the answer was simple: from the new rules, your parents do not need a TAN — it is an ordinary PAN challan, and here is the seller's lower-TDS certificate so the deduction is fair. The 70-year-old buyers proceeded. The friction that nearly lost the sale turned out to be exactly the friction the 2026 change removes.
If your only loose end before you list is whether your PAN is correct and operative, that is precisely the kind of thing we sort quickly and properly — so the rest of the sale, buyer and all, can actually go through.
This guide reflects the buyer-side PAN-instead-of-TAN simplification for NRI property sales and the related TDS and PAN rules as observed by NriDirect in 2026. The 1 October 2026 effective date is drawn from trade and professional sources and should be confirmed against the official CBDT notification; tax rates, surcharge, the ₹10 crore Section 54/54F cap, thresholds and procedures change without notice and depend on your individual circumstances — verify current details with the Income Tax Department of India↗ and always consult a qualified chartered accountant or tax professional before transacting. NriDirect is an independent UK agent that assists only with PAN and consular paperwork, and is not affiliated with the Income Tax Department or any Indian government body.
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