TAN Application Guide for Buyers Purchasing Property from an NRI

If you are buying property from an NRI, one requirement catches most first-time buyers off guard: you need a TAN (Tax Deduction Account Number), not just a PAN. This is different from buying from a resident seller, and skipping it (or discovering it too late) is the single most common mistake that creates personal TDS liability for buyers. Here is exactly how to get one.

Is TAN Mandatory for Buying Property from an NRI?

It depends on when you pay and who the buyer is. For payments made before October 1, 2026, and for any buyer that is a company, firm, or LLP at any time, yes: the buyer must obtain a TAN before making any payment, a PAN alone is not enough, and the resident-seller Form 26QB route does not apply. The purchase falls under Section 195 (now Section 393(2) under the Income Tax Act 2025), which makes TAN-based TDS deduction and quarterly Form 27Q (now Form 144) reporting compulsory, with no minimum transaction value.

From October 1, 2026, resident individual and HUF buyers are exempt from this requirement. CBDT Notification No. 121/2026 (G.S.R. 830(E), dated September 22, 2026) inserted a new Schedule E into Form 141, specifically for "TDS on any consideration on transfer of any immovable property covered under section 393(2)." An eligible resident individual or HUF buyer can now report property details, PAN, and the TDS amount directly through this schedule using only their own PAN; no TAN application, and no Form 27Q, for that transaction.

The rest of this guide covers the TAN route below, which still applies if you are paying before October 1, 2026, or if the buyer is not a resident individual or HUF (for example, a company, LLP, or partnership firm).

The practical sequence where a TAN is still required:

1. Apply on Form 49B through the Protean (NSDL) portal as soon as the deal is firm. The fee is about ₹65 plus GST.
2. TAN is allotted in roughly 7 to 10 working days. A 14-digit acknowledgment number lets you track status.
3. Deduct TDS at the applicable Section 195 rate on every payment, including advances, and deposit it by the 7th of the following month via Challan ITNS-281.
4. File Form 27Q each quarter and issue Form 16A to the NRI seller.

Paying an NRI seller without deducting TDS makes the buyer an assessee in default under Section 201 (now Section 398): personally liable for the full un-deducted tax, plus interest at 1% per month and a Section 271C penalty equal to the tax not deducted.

Why a TAN Was Required Here, and Who Still Needs One

When buying from a resident seller above ₹50 lakh, Section 194-IA applies, and the buyer simply files Form 26QB using their PAN; no TAN needed. When the seller is an NRI, the transaction falls under Section 195 (now Section 393(2)) instead, which is a full TDS obligation with no minimum threshold. Historically, Section 195 compliance required the payer to hold a TAN, deposit TDS via challan, and file the quarterly Form 27Q (now Form 144) return, with the PAN-only Form 26QB process not applying at all.

From October 1, 2026, that changes for one category of buyer: a resident individual or HUF can instead use the new Schedule E in Form 141, reporting directly against their PAN. Everyone else (companies, firms, LLPs) and anyone paying before October 1, 2026 still needs a TAN, and the rest of this section walks through that process.

Step-by-Step TAN Application Process

1. Get Form 49B ready: This is the TAN application form, available online through the Protean (formerly NSDL) e-Governance portal.
2. Fill in buyer details: Full name, address, PAN, and category (individual, HUF, company, etc.).
3. Submit online and pay the fee: The application fee is nominal, around ₹65, payable online at the time of submission.
4. Acknowledgment generated: A 14-digit acknowledgment number is issued immediately, which can be used to track the application status.
5. TAN allotted: The TAN is typically issued within 7 to 10 working days and communicated electronically. A physical TAN allotment letter can also be requested.
6. Use the TAN going forward: Once allotted, the TAN is used to deposit TDS via Challan ITNS-281 and to file Form 27Q every quarter for this transaction; and can be reused for any future Section 195 deductions.

Documents Needed

• PAN card of the buyer (or all buyers, if jointly purchasing)
• Address proof matching the application
• Details of the category of deductor (individual, firm, company, HUF)

The process is straightforward and does not require the NRI seller's involvement; it is entirely the buyer's responsibility and can be completed independently, ideally before the sale agreement is finalized.

Timing: Apply Before, Not After

A TAN cannot be backdated once a payment has already been made to the NRI seller without TDS deduction. Apply for the TAN as soon as the transaction is seriously under negotiation, well before any advance or full payment is made. Buyers who make payments first and try to sort out TAN and TDS afterward risk becoming an assessee in default under Section 201 (now Section 398), with interest and penalty exposure on top of the TDS itself.

What Happens Without a TAN

If a buyer pays an NRI seller without deducting TDS because they didn't realize a TAN was required, the buyer becomes personally liable for the full TDS amount, plus interest at 1% per month for non-deduction and a penalty equal to the tax not deducted under Section 271C. Getting the TAN in place first is a small administrative step that avoids a significant personal liability later. Sellers navigating the other side of this transaction can find guidance in our NRI Tax Advisory services.

Once the TAN is in hand, use our NRI Property TDS Calculator to work out exactly how much to deduct and deposit. If the NRI seller expects their actual tax liability to be much lower than the statutory TDS, point them to our guide on the Form 13 lower deduction certificate; it's the seller's responsibility to apply, but buyers benefit from a smoother transaction when it's in place before closing.