The Income-tax (Fifth Amendment) Rules, 2026 (Notification No. 121/2026, G.S.R. 830(E), dated 22 September 2026) bring into effect a change made by the Finance Act, 2026.
What changes
Until now, a buyer paying a non-resident seller had to obtain a TAN, deposit the tax and file a quarterly TDS statement, because the simpler challan-cum-statement route applied only to resident sellers. From 1 October 2026, a resident individual or HUF buyer can deduct and deposit the tax through the challan-cum-statement in Form 141, and issue the TDS certificate in Form 132. Form 141 now includes a new schedule (Schedule E) for the property, the seller and the stamp duty value.
What to check before you pay
- Confirm the seller's residential status for the year of sale.
- The rate is not the 1% that applies to resident sellers. It depends on the nature of the capital gain, plus the applicable surcharge and cess. Without a lower-deduction certificate (the seller can apply for one in Form 128), tax is usually deducted on the full sale price.
- Keep the seller's PAN, the sale deed and the stamp duty valuation together with the Form 141 acknowledgement.