A tweet went around NRI Twitter in early April 2026. The headline was seductive: “TCS slashed to 2%. NRIs can now buy Indian property without a TAN. Everything is easier.”
Two claims. One is wrong. The other is real but pointed in the opposite direction of what the tweet said. And the actual change, once you understand it, is quietly bigger than a rate cut would have been.
This is what happens when a Finance Act clause, a CBDT notification, and a half-read Budget memorandum meet a 280-character limit. If you own property in India from abroad, you need the version with the footnotes.
The TCS claim: a threshold hike, not a rate cut
Let’s start with the simpler one.
The tweet’s “2% TCS” figure does not exist anywhere in the Income-tax Act. What people are pointing at is a genuine change to Section 206C(1G), the clause that governs TCS on foreign remittances under the Liberalised Remittance Scheme (LRS).
Here is the history in one paragraph. In the 2023 Budget, the government raised TCS on most LRS remittances from 5% to 20%, effective 1 October 2023, with a carve-out for education and medical treatment. That “20% on everything” headline triggered panic, lobbying, and a wave of NRI migration advisors selling their services. The Finance Act 2025 then made two quiet fixes. It raised the threshold from Rs 7 lakh to Rs 10 lakh per financial year. And it removed Section 206CCA, which had been forcing banks to apply an even higher TCS rate on remitters who had not filed their income tax returns.
That is the “slashed” change. The threshold went up by Rs 3 lakh. The 20% rate on most purposes, including buying property abroad or investing in foreign securities, is intact.
Separately, the Finance Act 2025 also omitted Section 206C(1H), which was TCS on sale of goods by Indian sellers above Rs 50 lakh. This was the “TCS abolished” news that Indian business Twitter celebrated. It has nothing to do with NRIs, nothing to do with remittances, and nothing to do with property. But the two changes landed in the same Budget, and in the retelling they blurred into “TCS cut to 2%.”
There is no 2% rate. If someone tells you there is, ask them to cite the section number.
What this means for NRIs in practice. If you are sending money out of India under LRS, you now have an extra Rs 3 lakh of headroom per year before TCS kicks in. That is it. If you are sending money into India to buy or maintain property, TCS never applied to you in the first place. LRS governs outbound remittances by residents, not inbound remittances by NRIs.
The TAN claim: real, but inverted
Now the interesting one.
The tweet said “NRIs can now buy property without a TAN.” That sentence confuses who is buying and who is selling. Under the former Act, a buyer purchasing from a resident individual followed Section 194-IA and Form 26QB without a TAN. Under the current Act, the buyer must use the successor entry and form that apply on the payment date.
The real change is on the other side of the transaction. When a resident buys property from an NRI, the deduction happens under a different section. Historically that was Section 195, and because Section 195 triggered a quarterly Form 27Q filing, the buyer had to obtain a TAN (Tax Deduction and Collection Account Number) under Section 203A. For a one-off property purchase, this was three forms, a processing delay, and a compliance obligation for someone who would never need a TAN again.
Budget 2026 fixed this.
Since 1 October 2026, a resident individual or HUF buyer purchasing immovable property from a non-resident seller no longer needs a TAN for that transaction. The buyer can report and pay the deduction using PAN through Form 141 Schedule E under Section 393(2). No TAN application or quarterly non-resident return is required for that eligible buyer and transaction.
Two things about this matter more than the convenience.
First, it unlocks a bottleneck that was hurting NRI sellers. Buyers who discovered mid-deal that their seller was an NRI would often push for a price renegotiation or walk away, not because they minded the 12.5% deduction, but because they did not want to deal with the TAN paperwork. Listings with NRI sellers carried an invisible friction tax. That friction is now gone.
Second, the rates and the liability are unchanged. The tweet makes it sound like the whole NRI TDS regime got easier. It did not. The buyer still has to:
- Determine the correct amount and rate for deduction under the current law rather than copying a headline capital-gains rate into the payment form
- Apply the correct withholding basis and rate, taking account of any valid Section 395 lower-deduction certificate obtained through Form 128
- Accept the statutory consequences for under-deduction, including interest and potential penalty
The paperwork got simpler. The substance did not. If anything, the removal of the TAN excuse makes it harder for buyers to claim ignorance when they short-deduct. For a fuller walk-through of how that deduction actually works, our TDS on property sale by NRI guide is the starting point.
One scope limitation to note. The relief is only for resident individuals and HUFs. A company, partnership firm, LLP or other buyer category should confirm its TAN-based reporting obligation under the current rules. For NRI sellers dealing with developer buyback schemes or corporate buyers, the PAN-based Form 141 Schedule E route does not automatically apply.
What did NOT change in 2026
A good chunk of the Twitter commentary on NRI property rules in 2026 is about things that did not actually move. Quick audit:
Long-term capital gains rate. Still 12.5% without indexation under Section 112 for transfers on or after 23 July 2024. The 20%-with-indexation option that the Finance (No. 2) Act 2024 introduced for resident individual/HUF sellers holding property acquired before 23 July 2024 explicitly does not apply to NRIs. NRIs are locked into 12.5% without indexation. This remains one of the structural disadvantages of NRI status for older property, and no 2026 change touched it. We cover the mechanics in the NRI capital gains tax guide.
Section 54 and Section 54F reinvestment exemptions. Unchanged in Budget 2026. The Rs 10 crore cap on the reinvestment benefit, introduced by the Finance Act 2023 with effect from AY 2024-25, continues to apply to residents and NRIs alike. The Section 54 exemption guide walks through how the cap interacts with NRI sales.
FEMA and repatriation. No RBI circular in the 2025–2026 window disturbed the USD 1 million per financial year cap on NRO repatriation, the two-residential-property route under NRE, or the Master Direction on Remittance of Assets. If you want the full FEMA rules for NRI property, nothing in that post needs updating for 2026.
Form 15CA and 15CB. Still required for repatriation of sale proceeds. The simpler TDS deposit route under Section 397(1)(c) does not relieve you of the Form 15CA/15CB obligation when you actually move the money abroad. Our Form 15CA/15CB guide remains current.
The bigger story: a new Income-tax Act from April 2026
There is one piece of 2026 news that got almost no airtime on NRI Twitter but matters more than the TCS or TAN headlines. The Income-tax Act, 2025 replaces the 1961 Act with effect from 1 April 2026.
It is, in substance, a consolidation and rewrite rather than a policy overhaul. Rates are unchanged at enactment. What moved is the section numbering. Section 195 of the old Act has become Section 393(2) in the new one. The TAN provisions live in Section 397. The capital gains regime is in a new Chapter with its own numbering. If you read a CA blog, a circular, or a tax notice after April 2026 and the section numbers look unfamiliar, this is why.
For NRIs dealing with India at a distance, the practical implication is this: any checklist, template, or reference document you had pinned from 2023 that cites “Section 195” or “Section 194-IA” uses the repealed Act’s numbering. The current Act reorganised the provisions, and the reporting forms have also changed. Use current citations and forms when preparing a transaction or responding to a notice.
The current Form 141 Schedule E route
Here is the single most common operational trap we are already seeing in April 2026.
The Income Tax Department added Schedule E to Form 141 from 1 October 2026. It is specifically for a resident individual or HUF buyer purchasing immovable property from a non-resident seller under Section 393(2). The buyer files it through the e-filing portal using PAN and enters the property, payment, seller, withholding-rate and certificate details required by the schedule.
Form 144 remains relevant to TAN-based reporting for non-resident payments outside this narrow PAN-based relief. The correct route therefore depends on the buyer’s legal category and the deduction date, not simply on the seller being an NRI.
What you should actually do
Five things, in priority order.
1. Confirm the buyer’s category before fixing the payment workflow. A resident individual or HUF can use Form 141 Schedule E for deductions from 1 October 2026. Do not assume that the same PAN-based route applies to an entity buyer.
2. Apply for a lower-deduction certificate before the sale, not after. Under the Income-tax Act, 2025, the application is Form 128 under Section 395(1). The former Section 197/Form 13 terminology belongs to the old Act. File early enough for the application to be assessed before the payment date. After the sale, the practical recourse may be the TDS refund route.
3. Update your reference material. If you are holding template emails or a DIY checklist that cites the 1961 Act section numbers, prepare to replace them for transactions from April 2026 onwards. The complete NRI selling guide is kept current, so bookmark that rather than a static PDF.
4. Do not assume rate changes from tweets. Ask for the section number. If someone tells you TCS has been cut, TDS has been slashed, or a new exemption has been introduced, the only legitimate citation is a Finance Act clause number or a CBDT notification reference. Anything else is Twitter.
5. Keep your document trail ready and portable. The rule changes of the last 18 months have made it clear how often NRI compliance needs to respond to something that was not on the radar six months earlier. Scattered WhatsApp scans and email attachments are not a system. A platform like Assetly lets you centralise sale deeds, TDS certificates, Form 15CA/15CB filings, lower-deduction certificates and tax return acknowledgements, so that when the next regulatory surprise lands you are not reconstructing history from memory.
Related Reading
- TDS on Property Sale by NRI: The Complete Guide - the current Section 393(2), Form 141 Schedule E and lower-deduction workflow
- Capital Gains Tax for NRI Property Sales - how the 12.5% regime actually computes and why NRIs cannot use indexation
- Section 54 Capital Gains Exemption - the reinvestment route and the Rs 10 crore cap
- NRI TDS Refund on Property Sale - how to recover the over-deducted amount after the sale
- FEMA Rules for NRI Property - repatriation caps, NRO vs NRE, the two-property route
- Form 15CA and 15CB Explained - the certification chain you need before money leaves India
Assetly is a property document management platform that helps NRIs and remote owners organise, verify, and track their Indian property paperwork from anywhere in the world. Learn more.
