The short answer
From 1 October 2026, a resident individual or Hindu undivided family (HUF) deducting tax on consideration for an immovable-property transfer covered by section 393(2), Table 17, will not have to obtain a Tax Deduction and Collection Account Number (TAN) for that transaction. The Finance Act 2026 creates a narrow TAN exemption; it does not cancel the underlying tax-deduction requirement.
Who the change covers
Section 87 of the Finance Act 2026 amends section 397(1)(c) of the Income-tax Act, 2025, effective 1 October. The text names a resident individual or HUF that must deduct tax on consideration for a transfer of immovable property under section 393(2), Table 17. That provision covers payments to a non-resident payee. The amendment does not extend the stated exemption to every buyer type or every property transaction.
The distinction is practical: TAN is an account-number requirement; TDS is the deduction duty. The amendment changes the first for the named buyer and transaction. It does not remove the second. This is not the familiar resident-seller property-TDS route, so do not carry over a different transaction’s threshold or rate.
A pre-close check for the right lane
- Confirm the buyer is a resident individual or HUF for the applicable tax rule.
- Confirm the seller’s status under tax law; nationality alone does not establish tax residence.
- Ask a tax professional to confirm that the transaction falls under section 393(2), Table 17, and how the 1 October effective date applies to its payment schedule.
The Finance Act fixes the effective date, but the text reviewed here does not answer every contract or instalment pattern that crosses that date. For transaction-specific filing steps, check the current Income Tax Department instructions when the deduction is due. A professional can confirm the rate, timing and reporting form against the facts of the sale.
For a separate question about owning multiple homes and filing income tax, see BestProp.ai’s two-house-property tax explainer. That filing topic is distinct from the buyer-side TDS and TAN question here.
Does the October change remove TDS on a property bought from a non-resident?
No. Section 393(2) continues to specify tax deduction for covered payments to non-residents. The amendment removes the TAN requirement for the named resident-individual/HUF transaction from 1 October.
Does the exemption apply to every buyer?
The amended wording names a resident individual or HUF. It does not state a blanket TAN exemption for companies or all other buyer types.
BestProp.ai’s tax read
Treat the update as a compliance-process change with a defined buyer and transaction scope. Before relying on it, match the buyer, seller’s tax status, section and payment timing; if a contract straddles 1 October, get advice on the specific sequence rather than assume the effective date answers every instalment question.
Sources and limits
The operative change is in section 87 of the Finance Act 2026. The Income Tax Department’s section 393 text sets out TDS on payments to non-residents. This article explains the stated TAN exemption at a high level; it does not determine a particular seller’s residence, withholding rate or filing treatment.