## Buying Property from NRIs? Bid Adieu to TAN Hassles!
Buying property in India from a Non-Resident Indian (NRI) seller has long been a complex affair, especially concerning Tax Deducted at Source (TDS). For years, individual buyers faced the hurdle of obtaining a Tax Deduction and Collection Account Number (TAN). The good news? Recent tax law changes have brought a welcome relief, making the process smoother for property buyers.
### The Pre-2023 Scenario
Previously, when an Indian resident purchased immovable property from an NRI, they were obligated to deduct TDS under Section 195. This often meant the buyer had to apply for and obtain a TAN before they could deposit the TDS. This requirement often led to delays and increased compliance burden for individuals not typically involved in professional tax deductions.
### A Game-Changer: The Finance Act 2023
The Finance Act 2023 has introduced a pivotal change, specifically impacting property transactions with NRIs. For immovable property purchases where the consideration is ₹50 Lakhs or more, buyers no longer need a TAN to deduct TDS. This significant amendment primarily impacts transactions that, while involving an NRI, can now leverage the streamlined process akin to Section 194-IA. It effectively clarifies that individual and Hindu Undivided Family (HUF) buyers (not subject to audit) can now use their Permanent Account Number (PAN) for deducting and depositing TDS, harmonizing the process and making it considerably less daunting.
### The New Process: Form 26QB
Under the revised framework, buyers simply need to use their PAN and fill out Form 26QB. This online form, available on the TIN-NSDL website, facilitates the deduction and deposit of TDS. The buyer furnishes details of both buyer and seller, property specifics, and the TDS amount. Once paid, a TDS certificate (Form 16B) can be downloaded. This streamlined process bypasses the need for a separate TAN application, simplifying compliance for non-professional deductors.
### Why This Matters to You
This amendment is a significant boon for individual property buyers. It drastically reduces administrative overhead, saves time, and de-complexifies what was once a cumbersome process. While the general TAN requirement under Section 195 for other types of payments to NRIs by professional deductors remains, for property transactions, it’s definitively “time to lose the TAN.”
### Key Considerations
Buyers still need to be diligent about deducting the correct TDS amount. For NRIs, this is typically 20% (plus surcharge and cess) on long-term capital gains, or as per the Double Taxation Avoidance Agreement (DTAA) if the seller provides a valid lower rate certificate. Always ensure accurate PAN details of the NRI seller.
### Conclusion
The abolition of the TAN requirement for individual property purchases from NRIs marks a progressive step by the Indian government to ease compliance. If you’re considering buying property from an NRI, rejoice – the process just got a whole lot simpler. However, always consult with a tax advisor to ensure full compliance and avoid any potential pitfalls on [bizfandom.com](https://www.bizfandom.com/).
