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, as written, is nonsense. NRIs buying property from residents have never needed a TAN. The buyer deducts 1% TDS under Section 194-IA using their PAN and a Form 26QB challan-cum-statement. That has been the rule for over a decade.
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.
The Finance Bill 2026, effective 1 October 2026, amends Section 397(1)(c) of the Income-tax Act 2025 so that a resident individual or HUF buyer purchasing immovable property from a non-resident seller no longer needs a TAN. The buyer can now deposit TDS using their own PAN through a challan-cum-statement, on the same pattern as Form 26QB. No TAN application. No Form 27Q. No quarterly return obligation attached to a single 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:
- Deduct at 12.5% (plus applicable surcharge and cess) on long-term capital gains, or at slab rates for short-term, on the full sale consideration — not on the gain
- Deduct on the gross sale price unless the NRI seller has obtained a Section 197 lower deduction certificate (Form 13) in advance
- Accept personal liability under Section 201 if they under-deduct, plus interest and 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. If the buyer is a company, a partnership firm, an LLP, or any other entity, they still need a TAN and still file Form 27Q. For NRI sellers dealing with developer buyback schemes or corporate buyers, nothing has changed.
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” is now referring to sections that technically no longer exist by that name. The rules are the same. The citations need updating. This is exactly the kind of silent drift that hurts people three years later when they respond to a notice using the old section number and the assessing officer flags it.
The Form 144 confusion, briefly
Here is the single most common operational trap we are already seeing in April 2026.
An NRI flies to India to sell property. The buyer’s CA says, “As per the new Income-tax Act, you need to file Form 144 for the TDS.” The NRI logs into the income tax e-filing portal. There is no Form 144. Panic, delayed registration, and a lot of WhatsApp messages to advisors.
Here is what is happening. The CBDT, under the Income-tax Act 2025, has renumbered the entire suite of TDS return forms. Form 24Q is now Form 138. Form 26Q is now Form 140. Form 27Q, the quarterly TDS return for payments to non-residents, is now Form 144. Form 27EQ is now Form 143. The resident-side challan-cum-statement (what used to be Form 26QB for property purchases between residents) has become Form 141, with its property schedule explicitly restricted to resident transferors, which is why a buyer purchasing from an NRI cannot file it.
The CA is not wrong. Form 144 is the form. The NRI is not wrong either. It really is not on the e-filing portal. Both are missing the same detail: Form 144 is a quarterly TDS return filed through the TIN-Protean TDS return utility, not through the e-filing portal. The old Form 27Q was filed the same way. The renumbering changed the label, not the pipeline. The buyer still needs a TAN (until 1 October 2026 for individual/HUF buyers), deposits the tax by challan, and their CA files Form 144 quarterly through the TDS RPU. There is no upload button for Form 144 on incometax.gov.in and there should not be.
If you are in the middle of this exact problem right now, the short answer is: your CA is looking for the form in the right place; you are looking in the wrong place; the compliance is business as usual under a new name.
What you should actually do
Five things, in priority order.
1. If you are selling in India in 2026, time the paperwork around 1 October 2026. The TAN relief only helps transactions where the buyer deducts TDS on or after that date. Resident individual and HUF buyers will prefer your listing from October onwards because one chunk of their compliance friction disappears. If your sale is flexible on timing, this is a reason to wait.
2. Apply for a Section 197 Lower Deduction Certificate before the sale, not after. The TAN change does not touch the deduction rate. If your actual capital gains liability is a fraction of 12.5% of the sale price, and it usually is, the only way to stop the over-deduction upfront is Form 13 to the Assessing Officer under Section 197. File at least 30 to 45 days before the sale. After the sale, the only recourse is the TDS refund route, which can take a year or more.
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, Section 197 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 full walk-through of Section 195 / 393(2) deduction, Form 27Q, and lower deduction certificates
- 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.
