Lower TDS Certificate: Form 13 / Form 128 — citizen guide 2026

If too much TDS is being cut from your income or a buyer is deducting 20% plus on your property sale, you can apply for a lower or nil TDS certificate on the TRACES portal before the payment is made. From 1 April 2026 the form is Form 128 under section 395 of the Income-tax Act 2025, which replaces the old Form 13 under section 197.

Short on time? Jump to the step-by-step on TRACES. The one rule you cannot break: apply BEFORE the money is paid or credited. Once tax is deducted on a transaction, no certificate can undo it.

It is a certificate from the income-tax department that tells the person paying you (the deductor) to cut tax at a lower rate, or not at all. You apply because your real tax on that income is less than the standard TDS. You must apply before the payment.

For decades the rule lived in section 197 of the Income-tax Act 1961, with the application made in Form 13 under Rule 28AA. The Assessing Officer issued the certificate if your estimated tax justified a lower or nil deduction.

That regime has now been replaced. The Income-tax Act 2025 came into force on 1 April 2026. The matching provision is now section 395, the rules are the Income-tax Rules 2026 (notified by CBDT vide Notification No. 22/2026 dated 20 March 2026), and the application form is Form 128 under Rule 213.

So the answer depends on your timeline:

• Payment or credit on or after 1 April 2026: apply in Form 128 under section 395(1) for TDS, or section 395(3) for TCS.
• A certificate already issued under the old section 197 (old Form 13) for projected receivables of tax year 2026-27 stays valid for payments made on or after 1 April 2026.

Both old and new routes share the same backbone: the application is filed online on TRACES, the income-tax authority checks your estimated liability and past compliance, and the certificate is valid for a stated period of the financial year unless cancelled. This article uses the live Form 128 process; the logic is the same one people still search for as Form 13.

This is not PF Form 13. The EPFO Form 13 for transferring your provident fund when you change jobs is a completely different document with nothing to do with TDS. If that is what you need, read PF transfer on job change with Form 13 instead.

It is also not Form 15G or 15H. Those are self-declarations you give directly to a bank or payer when your total income is below the taxable limit, mainly for interest income. They need no approval. A lower or nil TDS certificate, by contrast, is issued by the department after it reviews your case, and it can cover capital gains, rent, professional fees and more.

The person whose income is being taxed at source, that is the deductee (the recipient of the payment), applies. Common situations:

• Your total income is below the basic exemption limit, but TDS is still being cut on interest, rent or fees.
• Your actual tax on a payment is far lower than the flat TDS rate.
• You are an NRI selling property in India and the buyer must deduct TDS on the whole sale value, not just your gain.

A valid PAN is mandatory. The application must be filed before the transaction or payment happens.

This is where the certificate saves the most money. When an NRI sells property in India, the buyer must deduct TDS under section 195 on the sale consideration paid to the non-resident.

After Budget 2024 (effective 23 July 2024), long-term capital gains on property are taxed at a base rate of 12.5% without indexation. But on an NRI sale the buyer deducts on the full sale value, then adds surcharge and 4% health and education cess, which pushes the effective deduction well above 20% of the sale price.

Your real tax is only on the capital gain (sale value minus cost), not the whole sale price. So without a certificate, far too much money is locked up until you file a return and claim a refund a year later. A lower or nil TDS certificate fixes the deduction to your actual gain, so you are not out of pocket for months.

1. Register on TRACES as a taxpayer. Go to the TRACES portal at www.tdscpc.gov.in and register using your PAN. Form 128 is filed only on TRACES; there is no offline or paper option.
2. Log in and open the request. Inside TRACES, go to the Statements / Forms section and choose the request for the lower or nil deduction certificate (Form 128).
3. Pick your category and fill the form. Select your applicant category and enter the income, the deductor (the payer or buyer), the relevant section, and your estimated tax computation.
4. Attach supporting documents. Upload your computation of income and gains, prior returns, and proof of the transaction (see the document list below).
5. Verify and submit. Sign with a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC) and submit the application to the jurisdictional TDS Assessing Officer.
6. Track and download. The officer reviews your estimated liability and compliance history. If satisfied, the certificate is issued for the specified period; download it and give the details to your deductor so they apply the approved rate.

Need help drafting any follow-up to the department if your file stalls? Use the AI RTI Drafter.

• PAN card of the applicant.
• For an NRI, passport and proof of non-resident status.
• Computation of estimated total income and capital gains for the year.
• Last few years of income-tax returns, if filed.
• The sale agreement, rent agreement, or contract that creates the income.
• Proof of cost of acquisition and improvement (for property).
• Details of the deductor, including their TAN.

• Applying after the payment. Once TDS is deducted on a transaction, Form 128 cannot fix that transaction. Apply first.
• Confusing this with PF Form 13 or Form 15G/15H. Section 395 (earlier section 197) needs department approval; the self-declaration forms do not.
• No PAN or a TAN mismatch. A wrong or missing PAN, or the wrong deductor TAN, gets the application rejected.
• Weak income computation. The officer issues the certificate on objective material under Rule 213. A vague estimate invites a refusal.
• Forgetting to hand the certificate to the deductor. The buyer or payer must actually receive it to deduct at the lower rate.

Dr. Shrawan Kumar Pathak, an NRI in Dubai, sold his flat in Pune for Rs 1.5 crore in May 2026. His actual long-term capital gain was about Rs 80 lakh. Without a certificate, the buyer would have deducted TDS on the full Rs 1.5 crore, locking up far more than his real tax.

Before signing the sale deed, he registered on TRACES, filed Form 128 under section 395 with his cost proofs and gain computation, and asked for deduction limited to his actual gain. The TDS officer issued the certificate for the deduction rate justified by his computation. The buyer deducted on that basis, and Dr. Pathak avoided a long wait for a refund. Apply before the deed, not after.

For payments on or after 1 April 2026 the live form is Form 128 under section 395 of the Income-tax Act 2025. An old section 197 certificate (Form 13) issued for projected receipts of tax year 2026-27 still works for those payments. New applications now go through Form 128.

They do the same job in two different laws. Section 197 of the 1961 Act, with Form 13 and Rule 28AA, applied until 31 March 2026. Section 395 of the 2025 Act, with Form 128 and Rule 213, applies from 1 April 2026. Both let a deductee get a lower or nil TDS certificate.

Online on the TRACES portal at www.tdscpc.gov.in. Form 128 has no offline or paper route. You log in with your PAN and submit with a Digital Signature Certificate or an Electronic Verification Code.

Form 15G and 15H are self-declarations you give straight to a bank or payer when your income is below the taxable limit, with no approval needed. A lower or nil TDS certificate is issued by the income-tax department after it reviews your estimated tax, and it can cover capital gains, rent and fees.

Yes. This is the most valuable use. The buyer otherwise deducts TDS on the full sale value plus surcharge and cess. A certificate limits the deduction to your actual capital gain, so you are not waiting a year for a refund.

It is valid for the period of the financial year stated on the certificate, unless the Assessing Officer cancels it earlier. It is not open-ended; you re-apply for a fresh year.

No. EPFO Form 13 transfers your provident fund balance when you change jobs. It has nothing to do with income-tax TDS. Do not mix the two when you search.

The application goes to the jurisdictional TDS officer. If it stalls, you can follow up through the TRACES grievance route and, where the delay holds up money you are owed, see how to chase an income-tax refund delay.

• Confirm your PAN is active and check whether your payment falls on or after 1 April 2026 (Form 128) or before it.
• Register on TRACES at www.tdscpc.gov.in if you have not already.
• Draft a rough computation of your income or capital gain so the estimate is ready.
• If you sell property, do this before signing the deed, never after.
• If you also need to deduct tax as a buyer or payer, read how to apply for a TAN to deduct TDS.

• Income-tax Act 1961, section 197, and Rule 28AA, Form 13 (Income Tax Department, incometaxindia.gov.in).
• Income-tax Act 2025, section 395; Income-tax Rules 2026, Rule 213, Form 128 (CBDT Notification No. 22/2026 dated 20 March 2026), effective 1 April 2026.
• Income-tax Act 1961, section 195 (TDS on payments to non-residents); Budget 2024 long-term capital gains rate of 12.5% on property effective 23 July 2024.
• TRACES portal, www.tdscpc.gov.in (TDS Reconciliation Analysis and Correction Enabling System).

• How to apply for a TAN to deduct TDS
• What to do about an income-tax refund delay
• PF transfer on job change with Form 13 (the unrelated EPF form)
• AI RTI Drafter tool
• The RTI Playbook