Lower / Nil Tds Deduction Certificate Assistance

Earlier Known as Form 13

A Lower or Nil TDS Certificate allows tax to be deducted at a lower rate or, where approved, at a nil rate instead of the normal applicable TDS rate.

Under the Income Tax Act, 2025, Form 128 is the prescribed application replacing the earlier Form 13. It may be useful where the taxpayer’s estimated tax liability is lower than the TDS or TCS otherwise applicable.

What is Form 128?

Form 128 can be used to apply for:

Lower deduction of TDS
Nil deduction of TDS
Lower collection of TCS
Nil collection of TCS

Once approved, the certificate specifies the rate at which tax is to be deducted or collected.

Who Can Apply?

Form 128 may be relevant for:

Individuals and HUFs
Businesses and professionals
Investors
Property sellers
NRIs
Other eligible taxpayers

When Should Form 128 Be Filed?

The application should generally be made before the payment or transaction and before TDS/TCS is deducted or collected.

It may be relevant for:

Interest or rental income
Professional or contractual receipts
Property sales
Capital gains
Investment income
Other significant taxable receipts

Excess TDS already deducted can generally be claimed through the Income Tax Return, subject to eligibility. A fresh application is generally required for each new Tax Year.

How to Get Nil TDS Certificate from Income Tax Department?

Form 128 is filed online through the TRACES portal.

Step-by-Step Guide for NIL TDS Certificate

Login and select the Form 128 application.
Provide estimated income and tax liability details.
Enter the relevant payer/TAN and transaction details.
Provide the required supporting information and documents.
Submit the application and track its status.
The certificate is issued upon approval with the applicable lower or nil TDS rate.

Documents Required for Lower TDS Certificate

Depending on the transaction, the application may require:

PAN details
Estimated income and tax computation
Previous Income Tax Returns
Financial statements, where applicable
Tax payment and TDS/TCS credit details
Payer’s TAN details
Transaction and income details
Other relevant supporting documents

Form 128 for NRI Property Sale

Form 128 can be particularly useful for an NRI property sale, where TDS may be higher than the taxpayer’s actual tax liability.

An approved certificate may help:

Reduce excess TDS deduction
Avoid unnecessary blockage of funds
Reduce dependence on a future refund
Ensure deduction at the approved rate

NRIs looking at how to apply for lower TDS certificate for NRI property transactions should generally apply before TDS is deducted.

Lower TDS Certificate for NRO Account Transfer

A Lower TDS Certificate for NRO account transfer may be relevant where an NRI is transferring or repatriating eligible funds and the estimated tax liability is lower than the applicable TDS requirement.

Where approved, tax may be deducted at the lower rate specified in the certificate, subject to applicable conditions.

Lower / Nil TDS Certificate Assistance

A Lower or Nil TDS Certificate requires proper estimation of income and tax liability, transaction details, and supporting documentation.

It can be particularly relevant for NRIs, property sellers, capital gains transactions, NRO account transfers, investment income, and other transactions involving substantial TDS where a lower or nil deduction may be applicable.