Non-Resident Indians (NRIs) experience major changes in their real estate transaction process. The government introduced digital tax services to taxpayers through the Income Tax Act 2025 and Union Budget 2026. The New TDS rules for NRI property sale 2026 serve as the initial requirement which NRI holders must follow before they can successfully sell their Indian assets.

The most celebrated change in this reform is the eliminating TAN for resident buyers. The Indian government established a Tax Deduction and Collection Account Number (TAN) requirement for Indian residents who wanted to purchase property from non-resident Indian (NRI) sellers. The requirement will end on October 1 2026 because buyers now need to use their Permanent Account Number (PAN) for tax payment.

New TDS Rules for NRI Property Sale 2026: The Shift to PAN-Based Compliance

Under the previous regime, the buyer was burdened with applying for a TAN, which often delayed property registrations and increased compliance costs. The New TDS rules for NRI property sale 2026 now align the process with resident-to-resident transactions for properties above ₹50 lakh.

1. Simplified Tax Deposit Mechanism

Starting from TDS on property purchase from NRI October 2026, buyers can use a TDS challan-cum-statement for NRIs (Similar to Form 26QB). This digital form serves as both the tax deposit challan and the formal statement of the transaction.

• Ease of Use: Buyers no longer need to wait for TAN allotment, which could take days.
• Direct PAN Integration: The tax is credited directly against the NRI seller’s PAN, ensuring real-time reflection in their Form 26AS/AIS.

2. Mandatory Deadlines and Timelines

The New TDS rules for NRI property sale 2026 strictly define the windows for compliance. Even though the TAN requirement is gone, the tax must be deducted at the time of credit or payment, whichever is earlier. Failure to deposit the deducted tax by the 7th of the following month still attracts heavy interest and penalties.

Capital Gains Tax on NRI Property 2026-27 and Rates

Understanding the tax liability is crucial before signing the sale deed. The Capital gains tax on NRI property 2026-27 follows the rationalized structure introduced to simplify high-value asset transfers.

1. Long-Term Capital Gains (LTCG)

For properties held for more than 24 months, the LTCG rate 12.5% for NRI property applies.

• The Indexation Factor: It is important to note that while the rate is a competitive 12.5%, the benefit of indexation (adjusting the purchase price for inflation) has been largely removed for assets sold after July 2024. However, for properties acquired before the 2001 cutoff or those falling under specific “grandfathering” clauses, legal consultation is advised to verify if the 20% rate with indexation remains a more beneficial alternative.

2. Short-Term Capital Gains (STCG)

If the property is held for 24 months or less, the gains are considered short-term. These are taxed at the slab rates applicable to the NRI’s total income in India, which can go as high as 30% plus applicable surcharge and cess.

Automating Relief: Lower TDS Certificate Form 13/Form 128

One of the biggest pain points for NRIs has been the excessive TDS deduction on the total sale value (e.g., 12.5% or 20% on the full ₹1 Crore) rather than just on the actual “profit” or capital gain.

1. The Transition to Form 128

The traditional manual application for a lower tax deduction has been replaced. The Lower TDS certificate Form 13/Form 128 (Form 128 is the new automated version) represents a shift toward “System-Driven Clearance.”

• Automated Processing: Under the New TDS rules for NRI property sale 2026, the Income Tax Department uses preset rules and data already available in the taxpayer’s profile to issue certificates.
• Electronic Issuance: This significantly reduces the time spent interacting with Assessing Officers (AOs) in cities like Jaipur or Ahmedabad.

2. Why NRIs must prioritize this

Without a certificate issued via Form 128, the buyer is legally obligated to deduct TDS on the entire sale consideration. Obtaining this certificate ensures that only the tax actually due on the gains is withheld, preserving the seller’s liquidity.

Repatriation: Form 15CA and 15CB for Repatriation 2026

Selling the property is only half the battle; moving the money to your country of residence (USA, UK, UAE, etc.) requires strict adherence to FEMA and Income Tax guidelines.

1. Declaration and Certification

To move funds from an NRO account to an overseas bank, NRIs must file Form 15CA and 15CB for repatriation 2026.

• Form 15CA: This is an online self-declaration by the NRI remitter.
• Form 15CB: This is a certificate from a Chartered Accountant (CA) confirming that the appropriate taxes have been paid and all New TDS rules for NRI property sale 2026 have been met.

2. The USD 1 Million Limit

Under the Liberalised Remittance Scheme (LRS) and FEMA rules, NRIs can repatriate up to USD 1 million per financial year from their NRO account balances, which includes property sale proceeds. The bank will conduct a strict verification process for Form 15CA and 15CB documents which customers need to submit before they can request an outward wire transfer for repatriation 2026.

Conclusion: Navigating the 2026 Transition

The move toward PAN-based compliance and the eliminating TAN for resident buyers are welcome changes that remove significant friction from the Indian real estate market. However, with lower rates like the LTCG rate 12.5% for NRI property comes a more rigorous, data-driven oversight by the tax authorities.

For NRIs in the Rajasthan and Gujarat belts, where property values have surged, the New TDS rules for NRI property sale 2026 offer a chance for a much cleaner exit. By utilizing the Lower TDS certificate Form 13/Form 128 (Form 128 is the new automated version) and ensuring correct filing of Form 15CA and 15CB for repatriation 2026, you can ensure your hard-earned gains reach your global bank account without legal delays.