Lower TDS Certificate for NRI Property Sale: Form 13 / Form 128
Lower TDS certificate for NRIs selling property in India: Form 13 (now Form 128), documents, timeline, buyer's TAN, FY 2026-27 rates and skipping it.
By the PlotPehra Land DeskUpdated 7 min read
Stop 14% being held back
On this page
- Why does the buyer deduct TDS on the full sale value?
- How much TDS is deducted on an NRI property sale in FY 2026-27?
- What is a lower TDS certificate, and what is it called now?
- Is applying for a lower TDS certificate worth it?
- What documents do you need for Form 128 (formerly Form 13)?
- How do you apply, step by step?
- What happens if you skip the certificate?
- What should you check before you sell?
When an NRI sells property in India, the buyer must deduct tax at source, and without a lower TDS certificate they will usually deduct it on the full sale price: about 14.3% of a ₹1 crore sale. The certificate, applied for on Form 13 under the old Act and Form 128 since 1 April 2026, tells the buyer to deduct only on your real gain.
Apply as soon as the price and buyer are fixed. Here is how it works, what to collect, how long it takes, and what happens if you skip it.
Why does the buyer deduct TDS on the full sale value?
Because the law makes the buyer responsible, and the buyer cannot check your cost. Any payment to a non-resident that is chargeable to tax must have TDS deducted. This was section 195 of the Income-tax Act, 1961, and since 1 April 2026 it is section 393(2) (Table, serial number 17) of the Income-tax Act, 2025.
In law, only the gain is taxable. In practice, a buyer who deducts too little is liable for the shortfall, interest and penalties. So most buyers, and their CAs, play safe and deduct on the whole price unless you hand them a certificate from the tax department.
How much TDS is deducted on an NRI property sale in FY 2026-27?
For a long-term sale, 12.5% plus surcharge and 4% cess, which is 13% to 14.95% of the amount taxed. Property held for more than 24 months is long-term, and for inherited property the previous owner's years count too.
| Sale price (FY 2026-27) | Rate built up | Effective TDS rate |
|---|---|---|
| Up to ₹50 lakh | 12.5% + 4% cess | 13% |
| ₹50 lakh to ₹1 crore | 12.5% + 10% surcharge + 4% cess | 14.3% |
| Above ₹1 crore | 12.5% + 15% surcharge + 4% cess | 14.95% |
| Short-term (held 24 months or less) | 30% + surcharge + cess | about 31.2% or more |
Long-term gains since 23 July 2024 are taxed at 12.5% without indexation for NRIs. The surcharge on these gains is capped at 15%.
A worked example
You sell an inherited plot for ₹1 crore. The previous owner's cost, or its value on 1 April 2001, works out to ₹40 lakh, so your gain is ₹60 lakh.
- Without a certificate: TDS on ₹1 crore = ₹12.5 lakh + ₹1.25 lakh surcharge + ₹55,000 cess = ₹14.3 lakh.
- Your actual tax: 12.5% of ₹60 lakh = ₹7.5 lakh, plus 10% surcharge and 4% cess = ₹8.58 lakh.
- Held back for nothing: about ₹5.72 lakh, until a refund comes through.
The TDS on NRI property sale calculator runs these numbers for your own price and cost.
What is a lower TDS certificate, and what is it called now?
It is an order from your income-tax Assessing Officer telling the buyer to deduct at a lower rate, on a lower amount, or not at all. Under the 1961 Act it was a section 197 certificate applied for on Form 13. From 1 April 2026 it is section 395(1) of the Income-tax Act, 2025, and the form is Form No. 128. See our glossary entry on the lower TDS certificate.
The new Act renumbered almost everything. If your CA, bank or buyer uses old names, this is the map:
| What it is | Income-tax Act, 1961 | Income-tax Act, 2025 (from 1 April 2026) |
|---|---|---|
| TDS on payments to a non-resident | Section 195 | Section 393(2), Table serial 17 |
| Seller's lower or nil TDS certificate | Section 197, Form 13 | Section 395(1), Form 128 |
| Buyer asks the officer what share is taxable | Section 195(2) | Section 395(2) |
| Forms to send money abroad | Forms 15CA and 15CB | Forms 145 and 146 |
| Tax rate on long-term gains | Section 112 | Section 197 |
Is applying for a lower TDS certificate worth it?
Usually yes, when your gain is much smaller than the price, which is common with inherited property and land bought long ago. The bigger the gap between TDS on the full price and your real tax, the more a certificate saves you in money held back. Try the check below.
30-second check
Is applying worth it?
General guidance, not legal or tax advice. Check your own case with a local professional.
What documents do you need for Form 128 (formerly Form 13)?
You need proof of the sale, proof of how and at what cost you got the property, and a clear computation of the gain. The officer is deciding how much tax you will really owe, so the stronger your cost evidence, the smoother the review.
Your checklist
Documents for a lower TDS certificate
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How do you apply, step by step?
The application is made online, and a CA in India usually files it for you. Form 13 used to be filed through the TDS portal, TRACES; ask your CA which portal the current Form 128 uses at the time you apply.
Fix the buyer and price
Sign an agreement to sell, or at least agree the price, buyer and payment dates in writing. The certificate is tied to this buyer and this transaction.Have a CA compute the gain
Cost, improvements, holding period, any exemption you will claim, and the tax due at FY 2026-27 rates.File Form 128 online
Upload the agreement, title papers, cost proof and computation. Keep the acknowledgement number.Answer the officer's questions
The Assessing Officer may ask for more papers or a clarification. Reply quickly; delays here are the usual cause of missed dates.Give the certificate to the buyer
Send a copy before the payment date. The buyer deducts at the rate or on the amount it states, and deposits that TDS.Collect your TDS certificate and file your return
The buyer must give you a TDS certificate. File an Indian income tax return for the year of sale, reporting the gain and the TDS.
How long does it take, and how long is it valid?
Expect several weeks, and longer if the officer has questions. There is no date you can safely count on, so apply the moment you have a buyer, and keep the payment date flexible.
The certificate applies only to the buyer, the amount and the period stated in it. It covers payments made while it is valid; it does not reach back to payments already made. If the deal falls through and you find a new buyer, you will generally need a fresh certificate.
Does the buyer still need a TAN?
From 1 October 2026, not if the buyer is a resident individual or HUF. Budget 2026 removed the need for these buyers to get a TAN just to deduct TDS on a property bought from a non-resident, and they can now deposit it using their PAN. Companies, firms and other buyers still need a TAN.
Either way, the buyer must deposit the TDS against your PAN and give you the TDS certificate. A refund is only possible for TDS that shows up in your tax records, so check your annual tax statement after the sale.
What happens if you skip the certificate?
Nothing is lost, but money is stuck. The buyer deducts on the full price, and you claim the excess back by filing an Indian income tax return for the tax year of the sale. The refund usually goes to an Indian bank account, often your NRO account, and only arrives after the return is processed.
That delay also slows repatriation. Sale money is sent abroad from your NRO account with Forms 145 and 146, the new names for 15CA and 15CB, and the rupees held back as excess TDS are not in that account until the refund comes. For the full sequence of a sale, see selling inherited property as an NRI. If someone is signing for you in India, our guide to making a power of attorney from abroad covers that step.
What should you check before you sell?
Make sure the land you are selling is still exactly what your papers say. Buyers' lawyers check the current record of rights, mutation entries and encumbrance certificate, and a surprise entry can delay the sale long enough for your certificate's timing to fall apart.
PlotPehra watches your land on two fronts while a sale is being arranged: every clear satellite image of the plot, and in 19 states a weekly check of the official land record for a new owner, mutation or change in area. A real person reviews any change and explains it by email and WhatsApp. No power of attorney, ever.
This article is general information, not tax or legal advice. Rates and forms were checked on 28 October 2026 for FY 2026-27 and can change. Talk to a chartered accountant in India before you agree a sale.
Questions people ask
It is a certificate from the income-tax Assessing Officer that tells the buyer to deduct TDS at a lower rate, on a lower amount, or not at all, based on the NRI seller's actual capital gain. It was issued under section 197 on Form 13; from 1 April 2026 it is section 395 of the Income-tax Act, 2025, and the application is Form 128.
For applications from 1 April 2026, Form 13 has been replaced by Form No. 128 under the Income-tax Act, 2025. Many people, banks and buyers still call it Form 13, and the purpose is the same. Your CA will file the current form online.
It depends on the tax office and on how complete your application is, so plan for several weeks rather than days. Apply as soon as you have a signed agreement or a firm price and buyer, and keep the payment date flexible until the certificate is issued.
Usually your PAN, the sale agreement, proof of how you acquired the property (purchase deed, will or inheritance papers), proof of cost and improvements, a computation of the expected gain, the buyer's PAN and TAN where needed, and details of any planned reinvestment such as a new house or 54EC bonds.
You cannot avoid TDS altogether if there is a taxable gain, but you can stop excess TDS. A lower or nil deduction certificate limits TDS to the tax actually due. Where there is no taxable gain at all, such as a sale at a loss, the officer can issue a nil certificate.
Until 30 September 2026, yes. From 1 October 2026, a resident individual or HUF buying from a non-resident can deposit the TDS using their PAN, without a TAN. Company and firm buyers still need a TAN.
About the PlotPehra Land Desk
Our team reviews satellite and land-record changes on NRI-owned land across India, and writes these guides from the questions families ask us. We’re not lawyers — for legal decisions, always speak to a local property lawyer. More about us · How we research our guides.
