On 24 September 2026, the Central Board of Direct Taxes (CBDT) issued Notification No. 121/2026, significantly extending Tax Deducted at Source (TDS) reporting obligations for transactions involving non-resident property sellers. The notification amends the Income-tax Rules to mandate enhanced disclosure in Forms 132 and 141, requiring buyers to capture additional details such as the seller’s Tax Residency Certificate (TRC) status, beneficial ownership information, and the specific article of the applicable Double Taxation Avoidance Agreement (DTAA). This move aligns with the government’s broader strategy to curb base erosion and profit shifting (BEPS) in the real estate sector and ensure effective exchange of information under international tax treaties. The changes take effect immediately and apply to all property transactions registered on or after the notification date.
Key Takeaways
- Expanded TDS Reporting Scope: Buyers must now report the non-resident seller’s PAN (if available), TRC details, and DTAA article claimed for treaty benefits directly in Form 132 (TDS certificate) and Form 141 (quarterly statement), increasing compliance burden on transferees.
- Revised Form Structures: Forms 132 and 141 have been restructured to include new fields for Legal Entity Identifier (LEI) of the non-resident, country of tax residence, and a declaration on beneficial ownership, enabling the Income Tax Department to cross-verify data with foreign tax authorities via Automatic Exchange of Information (AEOI) frameworks.
- Penalty Implications: Failure to furnish the enhanced particulars attracts penalties under Section 271H (up to ₹1,00,000) and disallowance of the TDS credit for the non-resident seller, potentially triggering litigation and interest liabilities under Section 201.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement