Is Form 13 still used, or is it Form 128 now?

Applications for Tax Year 2025-26 (AY 2026-27) still run under the old Form 13/Section 197 framework; from Tax Year 2026-27 onward, use Form 128 under Section 395(1).

How long does it take to get a lower TDS certificate?

Roughly 2-3 days to prepare and file, plus 15-30 days for assessing officer review; total time varies by jurisdiction and case complexity.

Can an NRI selling property in India apply?

Yes, this is the most common use case, since standard TDS applies to the full sale value rather than the actual capital gain.

Does the certificate cover TCS as well as TDS?

Yes. Form 128 covers both a lower/nil TDS certificate under Section 395(1) and a lower TCS certificate under Section 395(3); the same form serves both purposes.

Do I need a fresh certificate for each payer?

Generally yes; the certificate applies to the payer or payers named in the application, and a new client or buyer usually needs a separate or amended filing.

What if my ITRs aren't fully up to date?

File any pending returns and confirm your PAN is active before applying, since gaps here slow AO review and can result in higher withholding in the meantime.

Lower TDS Certificate in India: Form 128 (Formerly Form 13)

A lower or nil TDS certificate lets a taxpayer ask the assessing officer to direct a payer to deduct tax below the standard rate when actual tax liability is lower than what standard TDS would withhold. From Tax Year 2026-27, this is filed as Form 128 under Section 395(1) of the Income-tax Act, 2025 the form formerly known as Form 13 under Section 197. TaxLegit prepares the projection, files on TRACES, and tracks the application through the assessing officer's review.

What Is a Lower TDS Certificate, and Who Needs One?

A lower TDS certificate is an Assessing Officer's written direction, under Section 395(1) of the Income Tax Act, 2025, authorizing a payer to deduct tax at a reduced or nil rate instead of the standard statutory rate. It matters most where TDS is calculated on the gross value of a transaction rather than the actual profit or gain, which routinely over-withholds cash the taxpayer will never owe as tax.

The most common users are: NRIs selling Indian property, where TDS applies to the full sale value rather than the capital gain; freelancers and consultants with standard-rate withholding well above their real tax bracket; companies receiving royalty, interest, or fee income taxed at a treaty rate lower than the domestic withholding rate; and landlords or lessors where rental TDS exceeds their actual liability after deductions.

How the Application Works

Income mapping and treaty check

Identify every income stream and its statutory withholding rate. For NRIs, confirm the applicable DTAA and arrange the Tax Residency Certificate and Form 10F.Read moreRead less

Projected computation

Build an income statement forecasting revenue, expenses, deductions, and exemptions for the year, demonstrating that standard TDS would exceed the actual final liability.Read moreRead less

Form 128 submission

Upload the projection, three years of ITRs, sale or purchase contracts, and supporting invoices electronically via TRACES.

Assessing Officer review

The jurisdictional AO examines the projection and may raise queries on eligibility or figures track the portal and respond promptly.

Issuance

Once approved, download the Section 395(1) certificate and provide it to each payer named in the application, who then applies the approved lower or nil rate going forward.Read moreRead less

Processing typically takes 2–3 days of preparation on TaxLegit's side, followed by 15–30 days for AO review planning applications well before the transaction that triggers the withholding, not on the day of it.

Documents You'll Need

Three years of Income Tax Returns

PAN (active, and Aadhaar-linked where applicable)

Projected income statement for the year, with supporting assumptions

Sale agreement, purchase contract, or invoices relevant to the transaction

For NRIs: Tax Residency Certificate and Form 10F and DTAA reference where a treaty rate is claimed

A Note on NRI Property Sales

TDS on an NRI's property sale applies to the full sale consideration, not the capital gain which is why this is the single most common lower-TDS scenario TaxLegit handles. For property held over 24 months and sold on or after 23 July 2024, long-term capital gains are taxed at a flat 12.5% without indexation, plus applicable surcharge and 4% cess. Without a Form 128 certificate in place before the sale deed is registered, the buyer must withhold on the gross sale price often locking up far more cash than the NRI actually owes until a refund is processed months later.Read moreRead less

Selling Property or Receiving NRI/Foreign Payments? Pay Lower TDS Upfront.

Don't wait 12–18 months for an Income Tax refund. Share your transaction details and timeline we calculate your tax projections, file Form 13 on TRACES, and manage AO follow-ups until your certificate is issued.

Book Free Consultation

Common Mistakes to Avoid

Filing after the transaction has already started

AO review takes 15–30 days; applying at the last minute defeats the purpose.

Gaps in ITR filing or an inactive PAN

Both slow AO review and it can trigger higher withholding regardless of the projection's accuracy.

Underestimating the projection

An unrealistically low projected liability invites AO scrutiny and delays approval.

Not naming every payer

The certificate applies only to the payer(s) specified in the application a new payer generally needs a fresh or amended certificate.

Confusing this with Sections 206AB/206CCA

Those higher-TDS provisions for ITR non-filers were omitted effective 1 April 2025 and no longer apply don't let an old compliance checklist flag a non-issue.

Cost and Timeline

Stage	Timeline
Document collection and projection build	2–3 working days
Form 128 filing on TRACES	Same day, once documents are ready
Assessing Officer review	15–30 days
Certificate issuance to payers	Immediate on-approval

Fees are quoted after an initial review of your income streams and the number of payers to be named a straightforward salaried or single-property case costs less than a multi-payer corporate application.

Stop Locking Up Capital in Heavy TDS Refunds.

Share your income sources, payer details, and target deadline. We’ll build an accurate income projection, file Form 13 on TRACES, and actively track your application all the way to issuance so you keep your cash flow when you need it most.

Get Your Lower TDS CertificateClick Here

Lower TDS Certificate in India (Form 128)

Companies that rely on us