Form 13 (Now Form 128) for NRIs: How to Get a Lower TDS Certificate on Property Sale

General information, not tax or legal advice. Rules as of October 2026.

For an NRI selling property in India, the biggest shock is usually not the tax itself but the TDS. The buyer is required to deduct tax at source, and without a certificate most buyers deduct it on the whole sale price at the full NRI rate. On a Rs 2 crore flat that can mean close to Rs 30 lakh withheld, even when your real tax bill is a third of that. A lower TDS certificate fixes the mismatch at source, so the right amount is withheld on the day you sell rather than refunded a year later.

Is Form 13 still valid? What changed from Form 13 to Form 128

The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026, and the Income-tax Rules, 2026 came in with it. The lower or nil deduction certificate survived the overhaul unchanged in substance. Only the numbers moved. The income tax department's own Form 128 FAQ describes it as the application for a certificate under Section 395(1) and maps it to the old Section 197, with the procedure now in Rule 213 (earlier Rules 28 and 28AA).

If a lawyer, bank or sale agreement still says Form 13 or Section 197, read it as Form 128 or Section 395. New applications made after 1 April 2026 are filed as Form 128. A certificate issued as Form 13 before the changeover applies only for the period and payments stated on it, so check its dates before relying on it for a deal that slipped into the new tax year.

Two other things changed in 2026 that affect this process. First, from 1 October 2026 a resident individual or HUF buying from an NRI can deduct and deposit the TDS using their own PAN through Form 141 instead of first obtaining a TAN (CBDT Notification 121/2026). Second, Forms 15CA and 15CB used when you move the money abroad are now Forms 145 and 146 (earlier 15CA/15CB).

What a lower TDS certificate does for an NRI property seller

When a resident sells property worth Rs 50 lakh or more, the buyer deducts 1 percent. When an NRI sells, the buyer must deduct under Section 393(2) (earlier Section 195) at the rate that applies to the seller's capital gain, plus surcharge and cess. The law taxes only the gain, but a buyer cannot verify your purchase cost, so in practice buyers deduct on the full sale consideration to protect themselves. If they under-deduct, the liability and interest fall on them.

• Long-term property (held more than 24 months): 12.5 percent without indexation, plus surcharge and 4 percent cess. With the 15 percent surcharge that applies when the payment is above Rs 1 crore, the effective rate is about 14.95 percent.
• Short-term property (held 24 months or less): slab rates, which buyers usually apply at the top 30 percent, plus surcharge and cess.
• Since 23 July 2024 the long-term rate is 12.5 percent without indexation. Resident individuals and HUFs can choose 20 percent with indexation on property bought before that date, but NRIs cannot.
• NRIs cannot use Forms 15G or 15H to stop TDS. The lower deduction certificate is the only way to reduce TDS at source.

Form 128 asks the Assessing Officer to look at your real position and set a lower rate (or nil) that the buyer applies instead. Your final tax bill does not change. What changes is how much of your money is held by the tax department between the sale and your refund. If the 12.5 versus 20 percent question is new to you, our explainer on the 2024 change covers it.

Worked example: how much cash Form 128 frees up (illustrative)

The figures below are illustrative and rounded. Your own numbers depend on your purchase cost, holding period, other Indian income and the officer's assessment. Assume an NRI who bought a Gurugram flat in 2016 for Rs 1.10 crore including stamp duty and registration, spent Rs 6 lakh on documented improvements, pays Rs 2 lakh brokerage on the sale, and sells in 2026 for Rs 2 crore with no other Indian income.

In this example roughly Rs 18 lakh stays with you at the sale instead of sitting with the department until your refund is processed. If you can also show that part of the gain will be reinvested in a house under Section 82 (earlier Section 54) or in bonds, the officer may lower the rate further, though many officers want proof such as a purchase agreement or a capital gains account deposit before they allow it. You can run your own figures through our Form 13 calculator before you apply.

Who is eligible for a lower TDS certificate

Any person, resident or non-resident, can apply if the tax that will actually be payable is lower than the tax that would otherwise be deducted. Filing is optional; you apply only if you want a lower or nil rate. For NRI property sellers that is almost always the case on a long-term sale, because TDS on the gross price is far above tax on the gain. You need:

• A valid PAN in your own name. Form 128 cannot be submitted without one, and the PAN should not be shown as inoperative.
• A sale that has not yet happened. The application cannot be processed once the payment and deduction are complete.
• A TRACES taxpayer login linked to that PAN.
• A way to verify the application: a digital signature certificate, or an electronic verification code through Aadhaar OTP or net banking.
• Joint owners each apply separately, because the certificate is tied to each seller's PAN and share of the gain.

The certificate is not limited to property. NRIs also use it against TDS on rent, NRO interest and other Indian income when their total liability is lower than what is being deducted, and a separate certificate can be sought for each payer. If you are unsure of your PAN status, start with our guide to PAN for NRIs.

Documents required for Form 128 (Form 13)

Rule 213 tells the officer to weigh tax on your estimated income for the year, your tax record for the previous four tax years, any existing demands, and tax already paid or deducted. Your file has to prove each of those. Gather these before you start:

• PAN, passport, and proof of NRI status for the year, such as visa or overseas residence permit and travel dates.
• The purchase deed or allotment letter showing the cost and date of acquisition, with stamp duty and registration receipts.
• For inherited or gifted property, the previous owner's purchase deed and the inheritance or gift document, since their cost and holding period carry over.
• Bills and payment proof for improvements, and the brokerage agreement or invoice for the sale.
• The draft or signed agreement to sell, showing the sale price, payment schedule and buyer details.
• A capital gains computation and an estimate of your total Indian income and tax for the year, prepared by a chartered accountant.
• Acknowledgements of income tax returns filed for the last four years, or a computation of income for any year you did not file.
• Your Form 26AS or annual information statement showing tax already deducted or paid.
• Evidence of any reinvestment you plan to claim, such as a purchase agreement or capital gains account deposit.
• The buyer's name, PAN and address, and their TAN if they have one, with the expected date and amount of each payment.

Most of these overlap with what you need for the sale itself, so it saves time to build one file. Our checklist of documents an NRI needs to sell property lists the rest.

How to apply for Form 13 (Form 128) online, step by step

Form 128 is filed only online on the TRACES portal at tdscpc.gov.in. It cannot be filed offline or through the income tax e-filing portal. The steps below follow the department's FAQ.

1. 1Register or log in to TRACES as a taxpayer using your PAN. First-time registration asks for validation details, so allow a day for it.
2. 2Go to e-file and View, then File Forms, and select Form No. 128.
3. 3Part A and Part B: enter your details, residential status as non-resident, and choose lower or nil deduction under Section 395(1).
4. 4Part C: enter your estimated income and tax for the year, including the computed capital gain on this sale, and your tax position for earlier years.
5. 5Annexure I: enter the buyer's details and the amount and expected dates of the payments to be covered.
6. 6Upload the supporting documents and the capital gains computation as attachments.
7. 7Verify the application with a digital signature certificate or an electronic verification code and submit it. Note the acknowledgement receipt number.
8. 8Watch your email and the TRACES and e-filing worklists for queries from the Assessing Officer and reply quickly with documents.
9. 9Once approved, download the certificate from Downloads, then Lower or Nil Deduction or Collection Certificates, and send it to the buyer.

You can withdraw an application until it is processed, and there is no limit on the number of applications in a year, so if the deal price or dates change you can file a fresh one. If you are abroad and someone in India is handling the sale, your representative can coordinate the paperwork, but the application is still made against your own PAN. A power of attorney for NRIs selling property sets out what your holder can and cannot sign.

Lower TDS certificate processing time

There is no fixed statutory deadline. Rule 213 does not set a time limit for the Assessing Officer to decide, and the department's Form 128 FAQ only advises filing as early as possible and well before the transaction. Processing time therefore varies with the officer's workload and how clean your file is.

• Tax practitioners commonly report 15 to 45 days for a complete application, with simple cases often done in two to four weeks (TaxBuddy).
• High-value sales, inherited property, unfiled earlier returns or an outstanding demand often push it to six weeks or more.
• Applications filed close to 31 March and those with unanswered queries are typically the slowest.
• Our working assumption is four to eight weeks from filing to certificate, so fix the registration date after you file, not before.

The certificate is valid only for the period of the tax year printed on it, and only for the payer and amount it names. A sale that spills into the next tax year, or a second property, needs a fresh application. The officer can also cancel a certificate before it expires.

How the certificate is given to the buyer

Under Rule 213 the certificate is issued in the name of the person who has to deduct the tax, which in a property sale is the buyer. You download it from TRACES and send it to the buyer, ideally with a covering note that states the rate and the amount covered. The buyer, or their chartered accountant, can verify it on TRACES.

• The buyer deducts at the rate on the certificate, deposits the tax and reports it, quoting the certificate number.
• It applies only to payments made after it is issued. If a token or advance is paid earlier, the buyer must deduct at the full rate on that part.
• It covers only the amount stated. If the buyer pays more than that amount, the excess is subject to normal TDS.
• Ask the buyer for the TDS certificate they issue to you (Form 132 for buyers using Form 141), and check the credit in your Form 26AS before you file your return.

Common reasons a lower TDS certificate is rejected or delayed

The certificate is discretionary, not automatic. These are the problems we see most often:

• An outstanding tax demand against your PAN, even a small or old one. Clear or dispute it before applying.
• Returns not filed for one or more of the last four years, with no computation of income supplied.
• A capital gains computation that is not backed by documents, such as a missing purchase deed or undocumented improvement costs.
• Figures in the application that do not match the agreement to sell, or a buyer name or PAN that does not match.
• Claiming a reinvestment exemption with no evidence of the new purchase or deposit.
• PAN shown as inoperative because the NRI status was never updated in PAN records.
• Applying after the payment, or so close to registration that the queries cannot be answered in time.
• Unanswered queries from the Assessing Officer. An application can sit untouched until you respond.

If the application is refused, the buyer deducts at the full rate and you recover the excess as a refund in your return. A refusal is not open to an ordinary appeal. Your options are a fresh application with better documents, asking the Principal Commissioner or Commissioner to revise the order, or in rare cases a writ petition in the High Court.

What happens if you sell without a lower TDS certificate

Nothing illegal. The buyer deducts at the full rate on the sale price, and you claim the excess back by filing your income tax return for the year of sale. The catch is time: you wait for the tax year to end, file the return, and then wait for processing, which can stretch close to a year from the sale. A return filed with errors, or one that triggers a query, takes longer. The money is safe, just not in your hands. Our guide on whether NRIs need to file an ITR in India covers the return itself.

A certificate does not replace the return. You still file it, report the gain, and pay any tax still due or claim any excess. If you plan to move the proceeds abroad, the bank will ask for Forms 145 and 146, and our guide to repatriating property sale proceeds explains the limits and paperwork.

A practical timeline for NRI sellers

1. 1As soon as you decide to sell: confirm your PAN is active and shows NRI status, check for outstanding demands, and file any missing returns.
2. 2Before signing the agreement to sell: get the capital gains computation done and decide whether you will reinvest.
3. 3Once the agreement is signed: file Form 128 on TRACES with the buyer's details and payment schedule.
4. 4While waiting: keep token or advance payments small, since they will face full TDS if paid before the certificate.
5. 5On approval: send the certificate to the buyer and fix the registration date.
6. 6After registration: collect the buyer's TDS certificate, check Form 26AS, and file your return for the year.

If you are still deciding whether the sale is long-term or short-term, our explainer on the 24-month rule for NRIs will tell you which rate applies, and our team handles NRI property sales end to end.

The certificate only works if your buyer applies it. They will want to know why the rate on the paperwork differs from the default — the [buyer's guide to TDS on a purchase from an NRI](/blog/tds-on-property-purchase-from-nri-complete-guide) explains it from their side.