New Relief for Individuals and HUFs: Govt. Removes TAN Requirement for Property Purchase from Non-Residents

The Income Tax Act requires a person who deducts or collects tax at source (TDS and TCS) to obtain a Tax Deduction and Collection Account Number (TAN). The said number is allotted by the Assessing Officer (AO) under Section 397(1)(a) of the Act. However, there are still some cases where a person is not required to obtain any TAN; these exceptions are mentioned under Clause (c) of the said sub-section.

Currently, if a resident individual or HUF purchases an immovable property from a resident seller, the person buying the property is not required to obtain a TAN to deduct tax at the source. However, if the seller is a non-resident, the buyer must obtain a TAN to deduct tax at the source. This creates an extra compliance burden, especially when the purchase is involved in merely one transaction.

To resolve this issue and compliance burden on resident individuals or HUFs (Hindu Undivided Families), the government had given a proposal to amend section 397(1)(c) of the Income Tax Act. Under the proposed amendment, no resident individual or Hindu Undivided Family (HUF) will be required to obtain any TAN for deducting tax at source on payment made for the transfer of immovable property, even when the seller is a non-resident, provided the deduction is made under Section 393(2).

The said amendment is scheduled to take effect on October 01, 2026.