The CBDT’s Income-tax (Fifth Amendment) Rules, 2026 introduce key TDS compliance and reporting changes for immovable property transactions involving non-residents, effective from 1 October 2026.
The Central Board of Direct Taxes (CBDT) has notified the Income-tax (Fifth Amendment) Rules, 2026 through Notification No. 121/2026 dated 22 September 2026. The amended rules will come into force from 1 October 2026. The notification primarily provides the procedural and reporting framework for TDS on consideration for transfer of immovable property covered under Section 393(2), Table Sl. No. 17 of the Income-tax Act, 2025, where the tax is required to be deducted by a resident individual or Hindu Undivided Family (HUF).
1. TDS framework extended to specified immovable-property transactions
A significant change has been made in Rule 215(1). The prescribed framework now expressly covers deduction of tax under Section 393(2), Table Sl. No. 17, in respect of a transaction where a resident individual or HUF is required to deduct tax at source on consideration for transfer of immovable property.
The amendment therefore brings this category of property transactions within the prescribed TDS reporting mechanism under the Income-tax Rules, 2026.
Importantly, the notification itself does not prescribe a new TDS rate. The amendment principally lays down the rules and forms required for reporting and compliance with the underlying statutory TDS obligation.
2. Corresponding amendment to Rule 218
Rule 218(3) has also been amended so that its provisions relating to amounts deducted under Section 393(1) now expressly extend to Section 393(2).
A new clause specifically covers consideration for transfer of immovable property falling under Section 393(2), Table Sl. No. 17, where the consideration is paid or credited by a resident individual or HUF.
This creates a corresponding procedural linkage between the statutory TDS provision and the reporting requirements under the Rules.
3. Amendment to Rule 219
Rule 219 has been amended to specifically include Section 393(2), Table Sl. No. 17 where a resident individual or HUF is required to deduct tax at source on consideration for transfer of immovable property.
The amendment also corrects a cross-reference in Rule 219(8), replacing the reference to sub-section (1) with sub-section (7).
4. Major changes in Form No. 132
The notification makes corresponding amendments to Form No. 132.
The form now specifically recognises transfer of immovable property by a non-resident to a resident individual or HUF as a relevant transaction, in addition to the existing categories such as transfer of virtual digital assets.
The notification also modifies the relevant reference to Rule 215 and makes changes to the notes accompanying the form.
Three important clarifications have been incorporated:
- Certain information will be mandatory where the deductee is a resident.
- Information in the form may be pre-filled to the extent possible.
- Amounts are to be reported in rupees, unless otherwise specified.
5. Form No. 141 receives the most significant changes
The most detailed changes have been made to Form No. 141.
The heading of the form has been expanded to include Section 393(2), Table Sl. No. 17. The form will therefore cover the specified immovable-property transactions in addition to transactions already covered under Section 393(1).
New Schedule E
A completely new Schedule E has been inserted in Part B of Form No. 141 for:
TDS on consideration on transfer of any immovable property covered under Section 393(2), Table Sl. No. 17.
This Schedule requires extensive transaction-level information.
Property details
The new Schedule E requires:
- Address of the property;
- Type of property;
- Whether it is land other than agricultural land, a building/part of a building, or both;
- Details of all buyers;
- PAN and name of each buyer; and
- Proportion of total sale consideration payable or creditable by each buyer.
Details of non-resident sellers
The form also requires detailed information concerning the deductee/seller, including:
- PAN, if available;
- Name and status;
- Contact number;
- Email address;
- Address in the country or specified territory outside India;
- Tax Residency Certificate number;
- Tax Identification Number; and
- Proportion of total sale consideration receivable by the seller.
This represents a substantial increase in the level of information that will need to be collected and maintained for such transactions.
6. Instalment-wise reporting
The new Schedule E specifically accommodates transactions where consideration is paid in lump sum or instalments.
The deductor has to identify whether the payment represents the:
- First instalment;
- Subsequent instalment; or
- Last instalment.
For subsequent or last instalments, the previous acknowledgement number is required. In the case of the final instalment, the form also seeks the total consideration paid or credited, including the current instalment.
This is particularly important for property transactions involving staged payments.
7. Capital gains and TDS details
The amended form goes beyond basic property and seller information. It requires details concerning the seller’s transaction, including:
- PAN and name of the seller;
- Whether the seller has opted out of the taxation regime under Section 202(1), where applicable;
- Nature of capital gains—long-term or short-term;
- Proportionate stamp duty value;
- Amounts paid or credited in previous instalments;
- Amount paid or credited in the current transaction;
- Date of payment/credit;
- Amount on which tax is liable to be deducted;
- Rate at which TDS is deducted;
- Relevant certificates under Sections 395(1) and 395(2), where obtained;
- Amount of TDS deducted; and
- Date of deduction.
8. Special compliance for non-resident sellers without PAN
The amendment contains an important compliance safeguard concerning non-resident sellers.
Contact number, email ID and overseas address of the non-resident deductee must be furnished whether or not PAN is available.
Where PAN of the non-resident is unavailable, specified tax-residency and identification details must be furnished in accordance with Rule 217 to ensure that tax is not deducted at a higher rate.
The notification also clarifies the information required for Tax Residency Certificates and Tax Identification Numbers.
9. Separate filing where there are multiple deductors
Another important compliance point is that where there is more than one deductor, each deductor has to file a separate form. The form may contain pre-filled information to the extent possible.
Conclusion
The Income-tax (Fifth Amendment) Rules, 2026 represent an important procedural development for immovable-property transactions involving non-resident sellers and resident individual/HUF buyers.
The key takeaway is that the amendment primarily operationalises the TDS provisions through detailed reporting requirements and revised forms, particularly the newly introduced Schedule E to Form No. 141. It does not, in the notification itself, introduce a new TDS rate.
From 1 October 2026, professionals advising NRIs, property purchasers, HUFs and real-estate participants should therefore ensure that the necessary information regarding the property, buyers, non-resident sellers, tax residency, instalments, capital gains and TDS is collected before completing the transaction and its related TDS compliance.
Practical takeaway: The amendment is less about changing the substantive tax liability and more about making the TDS reporting and information requirements substantially more detailed and transaction-specific.