India’s Central Board of Direct Taxes (CBDT) has quietly removed one of the biggest procedural irritants faced by resident buyers purchasing property from overseas Indians. A notification (G.S.R. 830 E) issued on 22 September—and reported on 24 September—amends Rule 218 of the Income-tax Rules, introducing a PAN-based challan-cum-statement (Form 141) that entirely eliminates the need for a Tax-Deduction Account Number (TAN) when tax is withheld on a property deal with a non-resident seller. Until now, resident individuals and Hindu Undivided Families buying real estate from Non-Resident Indians (NRIs) had to first apply for a TAN, deduct tax at up to 20 per cent on the capital-gains component, deposit the amount with the treasury, and then issue a TDS certificate (Form 16 B) to the overseas seller. The multi-step process added weeks to closing timelines and deterred many expatriates from liquidating Indian assets. The amendment creates a two-step mechanism: (1) the buyer deposits the withheld tax using the revised Form 141—now featuring a dedicated “Schedule E” that captures property, buyer, seller and residency details—and (2) issues a new Form 132 certificate to the seller within 15 days. All information is linked to the parties’ Permanent Account Numbers, allowing the Income-tax Department to cross-match property registration data without a separate TAN. Tax advisers say the move aligns with India’s “Ease of Doing Business” agenda and the government’s push to digitise compliance. For expatriates, faster closure means quicker repatriation of sale proceeds; for resident buyers, it removes the hurdle of obtaining a TAN for a one-off transaction. Deloitte India notes that richer transaction-level data in Schedule E will also help curb under-reporting of capital gains by overseas sellers. Practically, parties still need to ensure that appropriate withholding rates are applied—often 20 per cent plus surcharge and cess unless a nil-or-lower-withholding certificate is obtained. Nonetheless, real-estate consultants expect the simplified process to unlock pent-up NRI property supply ahead of the festive season and make compliance less daunting for occasional buyers.
Source: The Economic Times – ET Wealth
