🏡 Ease of Doing Business: TAN Relaxation for Buying Property from Non-Residents

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Proposed Amendment to Section 397(1)(c) to Reduce Compliance for 

Resident Individuals & HUFs.

In a major relief for home buyers, the government has proposed a significant reduction in the compliance burden associated with purchasing immovable property from non-residents. The proposed amendment aims to streamline the process for individuals and families who are often caught in complex tax registration requirements for a single transaction.

The Current Challenge

As per the current provisions of Section 397(1)(a), every person deducting or collecting tax must apply for a Tax Deduction and Collection Account Number (TAN). This leads to a disparity in property transactions:

  • ✅ Resident Sellers: The buyer is currently not required to obtain a TAN.
  • ❌ Non-Resident Sellers: The buyer is currently required to obtain a TAN to deduct tax at source.

This creates an unnecessary burden for buyers who only need a TAN for one specific transaction.

The Proposed Change

To fix this, it is proposed to amend Section 397(1)(c) of the Act:

  • Resident Individuals and Hindu Undivided Families (HUF) will be exempted from obtaining a TAN.
  • This relaxation applies to tax deduction at source regarding any consideration for the transfer of immovable property under Section 393(2).
  • Effective Date: This amendment will take effect from October 1, 2026.

Professional Insight 💡

This proposal is a welcome "Ease of Living" measure. By removing the TAN requirement for individuals and HUFs, the government is treating transactions with non-resident sellers on par with resident sellers for administrative purposes. Taxpayers should note that while the TAN registration is being waived, the liability to deduct and deposit TDS still remains; only the procedural hurdle of maintaining a separate tax account number is being removed.

Source Reference: Amendment to Section 397(1)(c) of the Act.

Finance Act 2026

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