{"id":10784,"date":"2026-09-18T15:18:38","date_gmt":"2026-09-18T09:48:38","guid":{"rendered":"https:\/\/asbl.in\/blog\/?p=10784"},"modified":"2026-09-18T15:18:39","modified_gmt":"2026-09-18T09:48:39","slug":"lower-tds-certificate-form-13-for-nri-property-sale-process-timeline","status":"publish","type":"post","link":"https:\/\/asbl.in\/blog\/lower-tds-certificate-form-13-for-nri-property-sale-process-timeline\/","title":{"rendered":"Lower TDS Certificate (Form 13) for NRI Property Sale: Process & Timeline"},"content":{"rendered":"\n

Quick Answer<\/h3>\n

NRI sellers of property in India may face TDS on the entire sale consideration, even though their actual tax liability is based on the taxable capital gain. A lower TDS certificate can reduce this upfront deduction and improve cash flow. From 1 April 2026, Form 128 replaces Form 13 for applying for lower or nil TDS, making early application important before the buyer deducts tax.<\/p>\n<\/div>\n\n\n\n

Your buyer is about to withhold tax on the full sale price. Meanwhile, your actual tax is due only on the capital gain. That gap can trap several lakh rupees for a year or longer.<\/p>\n\n\n\n

However, a lower TDS certificate can shrink that withholding before money leaves the deal. Therefore, this guide walks you through Form 13, now Form 128, with a clear process and timeline. Finally, you will know when to apply, what to file, and what the buyer must do next.<\/p>\n\n\n\n

<\/span>Why TDS on an NRI Property Sale Is Deducted on the Full Sale Value, Not the Gain<\/span><\/h2>\n\n\n\n

When an NRI sells property in India, the buyer must deduct TDS. Under the Income-tax Act, 2025, Section 393(2) covers this duty. Earlier, people knew the same rule as Section 195.<\/p>\n\n\n\n

Importantly, TDS applies to the full sale consideration. In contrast, resident sellers often face only 1% TDS above a high threshold. For an NRI sale, there is no such minimum value cut-off.<\/p>\n\n\n\n

Also, the base long-term rate is usually 12.5% plus surcharge and 4% cess. Short-term sales attract a much higher effective rate. As a result, buyers withhold far more than tax on your true profit.<\/p>\n\n\n\n

If you want the liability side explained first, read our guide on NRI capital gains tax on property<\/a>. Then return here for the withholding fix.<\/p>\n\n\n\n

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<\/span>What a Lower TDS Certificate Actually Does (and What It Does Not)<\/span><\/h2>\n\n\n\n

A lower TDS certificate authorises the buyer to deduct tax at a reduced rate. In practice, that rate tracks your estimated capital gains tax, not the full sale value.<\/p>\n\n\n\n

Still, the certificate is not a tax exemption. You must still file your Indian return for the year. Also, final tax is settled only after assessment of your return.<\/p>\n\n\n\n

Besides that, the certificate names a specific buyer and transaction. Therefore, a change of buyer usually needs a fresh match in the application details. Otherwise, the reduced rate cannot be applied safely.<\/p>\n\n\n\n

<\/span>Form 13 Is Now Form 128: What Changed Under the Income-tax Act, 2025<\/span><\/h2>\n\n\n\n

From 1 April 2026, Form 128 replaced Form 13 for lower or nil deduction requests. Likewise, Section 395 replaced Section 197 as the enabling provision.<\/p>\n\n\n\n

Nevertheless, the purpose stays the same. You still ask the Assessing Officer to align withholding with estimated tax. Searchers still look for \u201cForm 13\u201d, so both names appear throughout this article.<\/p>\n\n\n\n

Item<\/strong><\/th>Up to 31 March 2026<\/strong><\/th>From 1 April 2026<\/strong><\/th><\/tr><\/thead>
Governing Act<\/td>Income-tax Act, 1961<\/td>Income-tax Act, 2025<\/td><\/tr>
Enabling section<\/td>Section 197<\/td>Section 395<\/td><\/tr>
Application form<\/td>Form 13<\/td>Form 128<\/td><\/tr>
Withholding section (NRI sale)<\/td>Section 195<\/td>Section 393(2)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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<\/span>A Worked Example: How Much Money the Certificate Actually Saves<\/span><\/h2>\n\n\n\n

<\/span>Worked Example 1: Long-term sale without a certificate<\/span><\/h3>\n\n\n\n

Assume you bought a flat for \u20b940 lakh. Later, you sell it for \u20b91.2 crore after a long holding period. Consequently, the capital gain is about \u20b980 lakh.<\/p>\n\n\n\n

Without a certificate, TDS is still computed on \u20b91.2 crore. At an effective long-term rate near 14.95%, withholding can reach about \u20b917.94 lakh.<\/p>\n\n\n\n

Line<\/strong><\/th>Figure<\/strong><\/strong><\/th><\/tr><\/thead>
1. Purchase cost<\/td>\u20b940,00,000<\/td><\/tr>
2. Sale price<\/td>\u20b91,20,00,000<\/td><\/tr>
3. Approximate capital gain<\/td>\u20b980,00,000<\/td><\/tr>
4. TDS without certificate (about 14.95% of sale)<\/td>\u2248 \u20b917,94,000<\/td><\/tr>
5. Approximate tax on the \u20b980 lakh gain<\/td>\u2248 \u20b910,40,000<\/td><\/tr>
6. Excess cash locked until refund<\/td>\u2248 \u20b97,50,000+<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

<\/span>Worked Example 2: Same sale after a lower TDS certificate<\/span><\/h3>\n\n\n\n

Next, suppose the Assessing Officer accepts your computation. Then the buyer deducts closer to your actual tax. As a result, most of that excess stays in your hands at closing.<\/p>\n\n\n\n

Afterwards, you still file the return and pay any balance due. However, you avoid parking several lakh rupees with the department for a long refund wait.(Source<\/a>)<\/p>\n\n\n\n

<\/span>Who Can Apply, and When to Start<\/span><\/h2>\n\n\n\n

Any NRI seller with Indian property income subject to TDS can apply. In short, you use Form 128 under Section 395 when estimated tax is lower than default withholding.<\/p>\n\n\n\n

Timing matters more than most sellers expect. Official guidance says you should apply well before the transaction completes. After TDS is already deducted on the completed deal, the certificate route no longer helps that payment.<\/p>\n\n\n\n

Therefore, start while negotiations are live. Ideally, file before you sign the agreement to sell. If the agreement is already signed, apply at once. Then pause further payments until the certificate arrives, wherever the deal allows.<\/p>\n\n\n\n

<\/span>Documents You Will Need Before You File<\/span><\/h2>\n\n\n\n

Collect these papers before you open the TRACES form. Incomplete proofs are a common cause of delay.<\/p>\n\n\n\n