Easy Transaction, Higher Accountability

Being an NRI (Non-Resident Indian) and a resident buyer seeking NRI-owned property, things were going historically tough due to logistical hurdles and complex tax compliance. Meanwhile, the Union Budget 2026-27 has been introduced by the finance minister of India, Nirmala Sitaraman, and introduced landmark reform in every sector, but streamlining the non-resident Indian’s property transactions is a proven game-changer that boosts liquidity in the real estate market in India with the new provisions in TDS (Tax Deducted at Source). We at Truevisory Realty Pvt. Ltd. stay informed of the regulatory changes and help our clients get the right property with all legal clearance. This also makes investment decisions precise by emphasizing transparency and a more organized real estate ecosystem. It could be a new hope for the industry to adopt simplified cross-border transactions. But what do you think—whether it is simplified or complicated?

TAN has become old; PAN is introduced.

There was a major shift in real estate policies when the budget was passed, and the Tax Deduction Account Number (TAN) was removed from the mandatory paperwork when purchasing property from an NRI. Earlier, it was a mandatory procedure to apply for a TAN before moving on to a deal. These things had been discouraging buyers from closing deals and causing delays, too. In addition, it was adding consultancy costs too. Now, there’s a significant update: PAN is now the primary for such transactions.

Key Updates that will be effective from Oct. 1, 2026:

• PAN replaces TAN: The property buyer can deposit or deduct TDS through PAN (Permanent Account Number).
• Easy and Transparent Challan: Easy buying and selling process, i.e., mirroring the resident-to-resident deal using a PAN-based challan.
• Standardization of Domestic Procedures: To make NRI-owned properties more marketable, the government is aligning NRI sales with our domestic standard procedure.

Understanding Tax Liability: TDS in 2026

One might be happy to see the simplification, but the tax liability is still a critical factor for LTCG (long-term capital gain) and STCG (short-term capital gain). Let us examine it for accurate financial planning.

Transaction	Holding Period	TDS Rate	New Rates (with Cess/Surcharge)*
LTCG	>24 Months	12.5%	~14.95%
STCG	<24 Months	30%	~31.2-35.8%

Please note that if the property price is above 50 lakhs and 1 crore, you may pay 10% and 15% surcharges, respectively.

Tactical Benefits of NRI Sellers

The new Union Budget 2026-27 not only reduces paperwork but also marks a strategic shift in NRI property investment in the country. How?  

Liquidity and Ease of Exit

Previously, 12.5-31.2% of NRI’s sale proceeds could get stuck. Reason: High TDS and compliance lags Now, the PAN-based system simplifies and speeds up the transaction cycle.

NRIs can reinvest or displace funds faster.

Equality as of Resident Sellers

Kicking the TAN hurdle by the government has leveled the playing field.  

•             No need to fear for extra compliance
•             Lead to better negotiation power
•             Higher Valuation for NRI Assets

 

Form 13

The Lower Deduction certificate (LDC) can still be applied for by filling out Form 13, as usual. Assessing officers will calculate tax on the actual gain, not on the sale value. Reduces upfront TDS from 20% to 2-3%  

Seamless transaction with new norms

• Buyers’ Side:
• Ensure Seller’s NRI Status first
• Use PAN for TDS deposit under 30 days
• Sellers’ Side:
• Keep a record ready for the cost of acquisition.
• In case of inherited property, the following are to be considered:
• Holding Period
• Cost of the Original Owner
• Repatriation: To transfer funds to an overseas account
• Hire a Chartered Accountant
• Fill out Forms 15CA and 15CB.

Limitation—up to USD 1 million per financial year

Final Remarks

The motto of the Indian government is clear and loud. The Union Budget 2026-27 has come with a vision to offer ease of capital management and movement by abrogating the TAN barrier and the consideration of PAN so that NRI Real Estate could get new wings after unblocking the biggest psychological and administrative complexity.