A resale apartment may look straightforward until the buyer learns that the owner lives outside India. The critical issue is not only where the seller receives the payment, but **the seller's tax residential status and the related withholding rules**. These can differ from a routine sale by a resident owner. Before paying a token amount, verify both the property documents and the transaction's tax treatment.
First confirm who legally owns the flat
Request the registered title deed, relevant chain-of-title documents, identity details, municipal or land records as applicable, society records and outstanding loan information. If there are co-owners, establish the ownership share and signing authority of each person. Compare the name in the title document with the seller's identity and tax particulars. A broker's statement that the seller is 'NRI' is not sufficient to determine income-tax residency.
Understand the 2026 withholding change
India's Income-tax Act, 2025 applies from 1 April 2026. The Income Tax Department states that, from **1 October 2026**, Form 141 includes **Schedule E** for eligible resident individual or HUF buyers purchasing immovable property from a non-resident seller. The Department further says that obtaining a TAN is no longer mandatory for those specified purchasers under this streamlined procedure. This is a reporting-process change, not a statement that the applicable tax deduction has disappeared or that every purchaser can use the same form.
Determine the correct withholding before payment
The rate, taxable amount, applicable surcharge, treaty position, available certificates and timing of deduction depend on the facts. Do not simply apply the common resident-seller property-TDS percentage to a non-resident transaction. Ask a chartered accountant to examine the purchase agreement, seller residency, consideration, tax documentation and any official certificate. Build the withheld amount and deposit responsibility into the payment schedule before transferring money.
Check Form 141 reporting responsibilities
The Income Tax Department's published FAQ explains which Form 141 schedules apply to which transactions. Schedule E is specifically designed for the relevant non-resident seller cases involving resident individual/HUF purchasers. Check the current official portal instructions for filing, depositing and certificates. Preserve transaction references, challans and correspondence. Different buyer types or older payments may require a different compliance route, so professional review is important.
