Summary: The Income Tax Department has confirmed that Schedule E of Form 141 became available with effect from 1 October 2026 for specified transfers of immovable property involving a non-resident seller and a resident individual or Hindu undivided family buyer. The new schedule operates within the Income-tax Act, 2025 framework under section 393(2), while Schedule B continues to address purchases from resident sellers under section 393(1). The portal explains that Form 141 is a PAN-login challan-cum-statement, identifies the permitted filer categories, describes month-wise reporting, and provides the payment and correction route. This article distinguishes the resident-seller and non-resident-seller cases, explains why the familiar 1% property-TDS rule must not automatically be applied to non-residents, and sets out practical documentary, rate-determination and filing controls.
- The October 2026 change in one sentence
- Resident seller and non-resident seller are different cases
- Schedule B: resident seller
- Schedule E: non-resident seller
- Form 141 schedules at a glance
- How to determine the withholding amount
- First establish the seller's residential status
- Do not apply the resident 1% rate mechanically
- Filing route and reporting deadline
- Portal navigation and PAN login
- Joint buyers and multiple sellers
- Example: why schedule selection matters
- Corrections, certificates and reconciliation
- Where a correction is made
- Transition from the 1961 Act
- Buyer-side document and control checklist
- What has and has not changed
- Frequently Asked Questions (FAQs)
- When did Form 141 Schedule E become available?
- Can a resident individual use Schedule E to buy property from an NRI?
- Can a company buying property from an NRI use Schedule E?
- Is the TDS rate automatically 1% for an NRI seller?
- When is Form 141 due for tax deducted in October 2026?
- Can multiple joint buyers file one Form 141?
- Where can Form 141 be corrected?
- Key Takeaways
The October 2026 change in one sentence
From 1 October 2026, the Income Tax Department’s Form 141 help material expressly includes Schedule E for a resident individual or resident Hindu undivided family (HUF) purchasing immovable property from a non-resident seller. The reporting is under section 393(2) of the Income-tax Act, 2025. This is a meaningful compliance development because buyers previously associated the PAN-based property challan with transactions involving resident sellers. The new schedule is not a reason to treat every non-resident sale like a resident sale; the nature of the payment, applicable tax withholding rate and documentary position remain important.
The official e-filing FAQ states that Form 141 is a consolidated challan-cum-statement for specified transactions. It replaces the former separate PAN-based forms 26QB, 26QC, 26QD and 26QE for transactions governed by the new Act. Schedule E is an additional October 2026 facility, not a general amendment to all forms or a retrospective declaration that every earlier non-resident property transaction can be re-filed through it. Buyers should use the date of the credit or payment event and the department’s transition guidance to identify the applicable statute and procedure.
Resident seller and non-resident seller are different cases
Schedule B: resident seller
Schedule B of Form 141 concerns property purchased from a resident seller under section 393(1), Table Serial No. 3(i). Its underlying property-withholding concept corresponds to the former section 194-IA. The familiar ₹50 lakh consideration/stamp-duty-value threshold and 1% rate relate to that resident-seller category, subject to the exact statutory language. The buyer should not determine the seller’s residence merely from an Indian postal address or the existence of an Indian bank account; income-tax residential status is a legal classification and must be established on facts.
Schedule E: non-resident seller
Schedule E is the portal’s specified reporting route where the seller is non-resident and the buyer is a resident individual or resident HUF. It is linked to section 393(2), rather than the resident property entry in section 393(1). The department specifically restricts Schedule E to this buyer category. Companies, LLPs and other purchasers cannot assume they can use it merely because they are buying from an NRI; the official FAQ directs other categories to the applicable TAN-based TDS statements. A non-resident seller’s tax position may depend on the nature of capital gains, holding period, statutory rate, surcharge, cess, treaty claims and any valid lower/nil deduction certificate.
Form 141 schedules at a glance
| Schedule | Transaction | Who may use the specified PAN-based schedule |
| A | Specified rent payments | Individual/HUF deductors as permitted |
| B | Property transfer from resident seller | Applicable categories of deductors |
| C | Specified contractor or professional payments | Individual/HUF deductors as permitted |
| D | Specified virtual digital asset transfers | Individual/HUF deductors as permitted |
| E, from 1 October 2026 | Property purchased from non-resident seller | Resident individual or resident HUF purchaser |
The schedules share a form number but do not share a universal rate or threshold. A separate Form 141 is needed for each type of transaction. The department’s FAQ also requires separate reporting for different months of deduction and separate forms for each deductor’s share where multiple purchasers are involved. These details matter when a property is purchased jointly or consideration is released through instalments and a bank loan. A common form does not mean that multiple unrelated withholding liabilities can be casually merged.
How to determine the withholding amount
First establish the seller’s residential status
The first control is obtaining the seller’s tax residential status for the relevant tax year. ‘NRI’ is often used commercially as shorthand, but the law is concerned with whether the seller is non-resident for income-tax purposes. A seller holding an overseas passport or living temporarily abroad is not, without more, a complete statutory analysis. Request a written declaration, PAN and supporting information appropriate to the transaction. Where the classification is doubtful, the buyer should obtain professional advice before releasing consideration because a later discovery of incorrect withholding can create buyer-side exposure.
Do not apply the resident 1% rate mechanically
The Income Tax Department’s Form 141 FAQ expressly states that there is no single TDS rate for all Form 141 schedules. Rates depend on the relevant section, nature of payment, residential status, PAN and a valid lower/nil deduction certificate. It also flags the possible higher-rate rule under section 397(2) and certificates under section 395. For Schedule E, therefore, a buyer should not simply multiply the sale price by 1% because that percentage is familiar from resident property purchases. Nor should the buyer automatically deduct tax only on an assumed gain without considering the statutory basis of withholding and any authoritative certificate.
A sale agreement may specify a net amount to be received by the seller, a gross price, instalment dates, loan disbursement and tax adjustment clauses. Those contractual details can change the cash-flow mechanics, but they do not displace statutory TDS obligations. The buyer and seller should settle in writing who bears the economic cost of withholding and how tax deposits will be evidenced. If a certificate specifies a lower rate or defined taxable amount, verify its validity, holder, period and covered transaction rather than relying on an informal email or an outdated certificate.
Filing route and reporting deadline
Portal navigation and PAN login
The department directs users to sign in with PAN credentials, open e-File, choose e-Pay Tax, select Income Tax Act 2025, proceed to New Payment and select Form 141. This is the stated route for the consolidated challan-cum-statement. The form requires accurate identification of the deductor and deductee, appropriate transaction schedule, relevant month of deduction and tax particulars. Buyers should retain a complete copy of the completed form, payment receipt, challan reference and the confirmation communication received from the portal.
The official FAQ says tax deducted must be deposited within 30 days from the end of the month of deduction along with Form 141, and also describes filing as within one month from month-end. For an October 2026 deduction, the practical compliance calendar should be set to 30 November 2026, subject to any formally notified extension or portal instruction. The relevant trigger is the month in which tax was actually deducted, not simply the date of registration of the sale deed. Where consideration is credited or paid in instalments, each relevant deduction event must be identified and tracked.
Joint buyers and multiple sellers
Where there are multiple deductors, the department states that each deductor files a separate Form 141 for the amount attributable to that deductor’s share. A single deductor may report multiple deductees only within the stated conditions, including the same month of deduction and the same corporate/non-corporate deductee category. A mixed set of company and non-company sellers requires separate forms. These rules should be mapped before funds move, particularly when a family purchases jointly from co-owners or a property transaction involves a corporate non-resident seller.
Example: why schedule selection matters
| Fact pattern | Initial reporting question | Required caution |
|---|---|---|
| Resident individual buys from resident individual | Is Schedule B applicable? | Test resident property TDS conditions |
| Resident HUF buys from non-resident individual in October 2026 | Is Schedule E applicable? | Determine section 393(2) withholding correctly |
| Domestic company buys from non-resident seller | Is Schedule E available? | Official FAQ points to applicable TAN-based route |
| Two resident individuals jointly buy from NRI | How many deductors report? | Separate Form 141 for each deductor’s share |
| Buyer pays instalments in October and November | Which month is reported? | Track deduction months and file separately |
These examples are filing-route illustrations, not computations of the tax rate. In an actual transaction, the correct TDS calculation may require capital-gains classification, documents showing acquisition and improvement, statutory exemptions, and a certificate from the competent tax authority. A buyer should not rely on a seller’s spreadsheet as the sole legal basis for reducing withholding. Conversely, excessive deduction can cause liquidity strain and refund delays for the seller, making advance rate verification commercially important.
Corrections, certificates and reconciliation
Where a correction is made
The Income Tax Department states that corrections to Form 141 are handled through the TDS-TRACES portal, not through the e-filing portal. The buyer should register on TRACES as a taxpayer as required and follow the applicable correction workflow. Common correction risks include an incorrect PAN, month of deduction, deductee type, transaction value or schedule. A corrected challan should be reconciled with the original bank debit and the seller’s tax-credit record. The department also explains that a TDS certificate can be downloaded through TRACES; issuing or sharing it with the seller is a necessary completion control.
Transition from the 1961 Act
The department’s TDS transition FAQ ties the applicable Act to the earlier of credit or payment. An event occurring on or before 31 March 2026 is governed by the 1961 Act; one occurring on or after 1 April 2026 is governed by the 2025 Act. Consequently, an older property deduction is not automatically converted into a new Form 141 transaction merely because its payment challan or correction is processed later. For transactions straddling March and April, analyse each triggering event and the correct historical form, rather than classifying the whole sale solely by the agreement date.
Buyer-side document and control checklist
Before payment, obtain the agreement, seller PAN and tax-residence evidence, ownership and consideration details, instalment schedule, and any valid lower/nil certificate. Identify the legal person making each payment and the person legally entitled to receive it. Prepare a written rate determination referencing section 393(2) and the relevant tax provisions, including any treaty or certificate relied upon. Where foreign exchange, repatriation or bank remittance is involved, keep that regulatory process distinct from the income-tax deduction obligation.
After payment, record the date of credit or payment, date of deduction, applicable rate, gross amount, tax deducted, net remittance and challan acknowledgement. Check that the schedule and deductee category match the actual facts. Download the certificate from TRACES and obtain the seller’s confirmation of the credit particulars. Retain all versions of the form and any corrections. The purpose is to avoid a situation where the buyer has paid tax but the seller cannot reconcile it, or where a correct bank payment is paired with the wrong statutory schedule.
What has and has not changed
Schedule E improves the designated PAN-login reporting path for a defined buyer/seller combination from 1 October 2026. It does not create a universal 1% NRI-property rate, abolish non-resident withholding law, remove the need for correct residential-status analysis or allow every type of purchaser to use a PAN-based form. The proper approach is to determine the statutory obligation first and choose the permitted reporting mechanism second. That sequence is especially important for transactions signed before October but involving deductions after the new schedule became available.
Frequently Asked Questions (FAQs)
When did Form 141 Schedule E become available?
The Income Tax Department states that Schedule E was introduced with effect from 1 October 2026 for the specified non-resident property-transfer reporting situation.
Can a resident individual use Schedule E to buy property from an NRI?
Yes, where the seller is a non-resident and the buyer is a resident individual, and TDS is required under section 393(2), subject to the official form conditions.
Can a company buying property from an NRI use Schedule E?
No. The department limits Schedule E to resident individual and resident HUF buyers and directs other categories to the applicable TAN-based statements.
Is the TDS rate automatically 1% for an NRI seller?
No. The resident-seller property rule and non-resident withholding rule differ. Determine the applicable section 393(2) rate and any certificate or higher-rate provision.
When is Form 141 due for tax deducted in October 2026?
The department specifies deposit within 30 days from the end of the month, with the challan-cum-statement. For an October deduction, plan for 30 November 2026 unless an official change applies.
Can multiple joint buyers file one Form 141?
No. The department states that each deductor must file a separate Form 141 for that deductor’s share of the relevant transaction.
Where can Form 141 be corrected?
The official FAQ directs corrections to the TDS-TRACES portal rather than the income-tax e-filing portal.
Key Takeaways
Schedule E began on 1 October 2026 for resident individual/HUF purchasers of property from non-resident sellers.
Use section 393(2) analysis for Schedule E; do not automatically apply the resident property 1% withholding rule.
File under the PAN-login Form 141 route, with month-wise tracking and separate forms for distinct deductors.
Retain tax-residence evidence, rate working, certificates, challans and TRACES correction history.
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Disclaimer: This article is published by TaxGuru solely for general information and educational discussion of the law, portal procedures and publicly displayed institutional terms as understood on 17 October 2026. It is not legal, tax, audit, investment or financial advice, and it does not establish any professional or client relationship. Statutes, notifications, rules, official clarifications, filing utilities, interest rates, eligibility and administrative practice may change or may apply differently to particular facts. Readers should independently verify the latest official records, preserve relevant documents and obtain advice from a qualified professional before filing, deducting tax, claiming credit or placing deposits. TaxGuru, its authors, editors, publishers and associates accept no responsibility or liability for any error, omission, reliance, financial loss, tax demand, interest, penalty, dispute or other consequence arising from use of this material; responsibility for compliance and decisions rests solely with the concerned person.
Source Links
- Income Tax Department Form 141 official FAQs, including Schedule E from 1 October 2026: https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/form-141-challan-cum-statement-deduction-tax-us-3931-3932
- Income Tax Department TDS transition FAQs: https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/%20tds%20compliance-faq
- Income Tax Department official Form 141 explanatory note: https://www.incometaxindia.gov.in/documents/d/guest/fn-141
