Form 128 — Lower / Nil TDS Certificate Application (Form 13 until Tax Year 2026-27)
Form 13 is the application an NRI files to get TDS on a property sale reduced to the actual tax, instead of the buyer withholding on the whole sale value. Under the Income-tax Rules 2026 it is renumbered Form 128 (Rule 213), applied for under Section 197 (Section 395). This guide walks through the TRACES process, the documents you need, how long it takes, and why applications get held up.
What Form 128 (Form 13) is
Form 128 — Form 13 in this year’s filings — is an application by the person receiving the income (the payee) to the Assessing Officer, asking for a certificate that authorises the payer to deduct tax at a lower rate, or nil. It is available to any person, resident or non-resident, but for non-residents the classic use is a property sale: without a certificate the buyer must deduct TDS under Section 195 (Section 393 from Tax Year 2026-27) on the entire consideration, and the certificate is the only way to bring that down to the tax actually due on the gain. The certificate is issued under Section 197, renumbered Section 395, which covers both lower and nil deduction.
How to apply — step by step
Register the NRI seller on TRACES
Create or log in to the seller’s account on the TRACES portal (tdscpc.gov.in). Form 13 / Form 128 is filed here, not through the ITR portal.
Compute the estimated capital gain and tax
Work out cost, improvement, transfer expenses and any Section 54 / 54EC / 54F exemption you intend to claim, and the tax on the net gain. This is the figure the certificate rate is built on.
File Form 13 (Form 128) online with annexures
Complete the application, attach the sale agreement, purchase deed, cost proofs, computation and the buyer’s TAN or PAN, and submit it to the International Taxation Assessing Officer with jurisdiction over the seller.
Respond to the Assessing Officer’s queries
The AO reviews the working and may ask for clarifications or more documents. A prompt, well-supported response is what keeps the timeline to a few weeks.
Receive the certificate and hand it to the buyer
Once issued, the certificate states the rate or nil deduction. Give it to the buyer before the sale is registered so TDS is deducted correctly the first time and no refund wait arises.
Form 128 documents readiness checklist
Tick what you have ready. This is a preparation aid, not a submission.
How long it takes
A complete, well-documented application is typically decided in about 3 to 6 weeks, though it varies by jurisdiction and workload. Because the certificate must be in the buyer’s hands before the sale is registered, the practical rule is to start the moment a sale is likely — not after the agreement is signed. Applying late is the single most common reason an NRI ends up with TDS on the full value and a long refund wait.
Why applications get held up
| Reason | How to avoid it |
|---|---|
| Cost of acquisition not evidenced | Keep the original purchase deed and payment proofs; for inherited property, the previous owner’s cost |
| Exemption claimed without a plan | Show the intended reinvestment or 54EC bond details, not just an intention |
| Wrong Assessing Officer | File with the International Taxation ward that has jurisdiction over the NRI |
| Buyer details missing | Have the buyer’s TAN (PAN from 1 October 2026) ready before filing |
| Applying too late | Start before the agreement so the certificate arrives before registration |
Form 128 and Form 129
Form 128 is the applicant’s form — the payee, such as the NRI selling the property, applies for the lower or nil certificate. In the renumbered rules a companion Form 129 also appears on the deductor side of the same Section 395 machinery. For an NRI property seller, the form you file is Form 128; the buyer simply acts on the certificate you obtain. Confirm the exact form and annexures on the TRACES portal at the time of filing, as the Rules 2026 are newly in force.
Old Act 1961 vs new Act 2025 numbering
Income-tax Act, 1961 (current filings)
- Application: Form 13
- Certificate section: Section 197
- TDS on NRI payment: Section 195
- Applies for FY 2025-26 (AY 2026-27) and earlier
Income-tax Act, 2025 + Rules 2026
- Application: Form 128 (Rule 213)
- Certificate section: Section 395 (395(1))
- TDS on NRI payment: Section 393
- Applies from Tax Year 2026-27 (1 April 2026)