Reduce TDS on NRI Property Sale with Lower TDS Certificate (Form 128)

Selling your property in India while staying abroad?

Most NRI sellers face one common shock during property sale — the buyer informs that TDS must be deducted at 13% to 15% on the full sale value.

This creates immediate concern:

• “Why is such a high tax deducted on full property value?”
• “My actual profit is much lower, then why this huge deduction?”
• “Can this TDS be reduced before sale?”

The answer is YES — through a Lower TDS Certificate.

Current TDS Rate on Property Sale by NRI (Without Lower TDS Certificate)

As per the latest applicable rates (post July 2024), TDS on property sale by NRIs is as follows:

• Up to ₹50 Lakhs → ~13%
• ₹50 Lakhs to ₹1 Crore → ~14.3%
• Above ₹1 Crore → ~14.95%

Important: This TDS is deducted on the entire sale consideration, not on your actual capital gain.

This means even if your actual tax liability is minimal or NIL (due to exemptions like Section 54), still lakhs of rupees get blocked as TDS.

Real Problem Faced by NRI Sellers

Let’s understand this practically:

• Property Sale Value: ₹2 Crore
• TDS Deducted by Buyer (~14.95%): ₹29.9 Lakhs
• Actual Tax Liability: ₹2–5 Lakhs or even NIL

Result:

• ₹25+ Lakhs unnecessarily blocked
• Refund only after ITR filing (6–12 months delay)
• Cash flow disruption and reinvestment issues

Solution – Lower TDS Certificate (Now Form 128)

The Income Tax Department provides a legal solution to this problem.

You can apply for a Lower or NIL TDS Certificate using Form 128 (effective from 1 April 2026), which allows:

• Reduction of TDS to 0% (Nil), or
• Lower rate such as 2% – 5% based on your actual tax

This ensures:

• You receive maximum sale proceeds immediately
• No unnecessary tax blockage
• Minimal or no dependency on refund process

But Here is the Ground Reality (Very Important)

Many assume this is a simple online process — just file Form 128 and get approval.

In actual practice, it does not work that way.

• Application is reviewed by International Income Tax Officer
• Detailed tax computation and justification required
• Supporting documents must be properly structured
• In most Bangalore cases, physical submission (Tapal) is required
• Follow-ups and clarifications are mandatory

Without proper handling, applications are often delayed or rejected.

What You Actually Need (Practical Approach)

If you are planning to sell property, you need:

• Correct capital gain calculation
• Proper tax planning (Section 54 / 54F / exemptions)
• Strong application drafting with justification
• Expert handling with Income Tax Office follow-up

This is not just form filing — it is complete representation before the Income Tax Department.

End-to-End Solution – From Lower TDS to Final Tax Filing

We don’t stop at getting Lower TDS approval. We handle complete support:

• Lower TDS Certificate (Form 128 approval)
• Coordination with buyer for correct TDS deduction
• Capital gain planning and exemption guidance
• Income Tax Return filing
• Refund processing (if any balance tax is deducted)

So your entire property transaction — from sale to final tax closure — is handled properly.

Why Early Action is Critical

• Apply at least 15–20 days before sale
• Once TDS is deducted, correction becomes difficult
• Delay may affect your registration timeline

Applying for a lower TDS certificate for NRI property sale helps in reducing unnecessary tax deduction and improves cash flow.

TDS Savings Calculator (Quick Estimate)

Estimate how much TDS you can save with a Lower TDS Certificate:

• Property Value: ₹1,00,00,000
• Standard TDS @ 14.95%: ₹14,95,000
• With Lower TDS @ 3%: ₹3,00,000
• Estimated Savings: ₹11,95,000

Note: Actual savings depend on capital gains and tax calculation.

Step-by-Step Process to Get Lower TDS Certificate for Property Sale (Form 128)

Getting a Lower TDS Certificate (LDC) for property sale — especially for NRI property transactions — is not just about filing an online form.

While the Income Tax Department provides an online facility, the actual approval depends on proper tax planning, documentation, and follow-up with the Assessing Officer.

Here is the complete practical process based on our experience in handling TDS on sale of property by NRI cases:

Step 1: Capital Gain Calculation & Tax Planning

This is the most important step to reduce your property sale TDS.

• Computation of long-term / short-term capital gains
• Indexation benefit calculation
• Planning exemptions under Section 54 / 54F
• Review of reinvestment options to reduce income tax

Note: Incorrect computation is the biggest reason for rejection of lower deduction certificate applications.

Step 2: Preparation of Lower TDS Application (Form 128)

Application is filed using Form 128 (new form replacing Form 13) through TRACES portal.

• Selection of correct income category (property sale)
• Entry of buyer details (TAN/PAN)
• Detailed income and tax liability working
• Justification for lower TDS rate or NIL rate

This step directly impacts whether you get approval at 0%, 2%, 5% or higher rate.

Step 3: Documentation & Supporting Evidence

To support your lower tax rate request, proper documentation is critical:

• Purchase deed and cost details
• Proposed sale agreement
• Capital gain working
• Last 3–5 years ITR
• 26AS / TDS details
• Passport & NRI proof
• Tax Residency Certificate (if applicable)

Strong documentation ensures faster approval and avoids unnecessary queries.

Step 4: Online Filing on TRACES Portal

The application is submitted online through TRACES:

• Login as taxpayer using PAN
• File Form 128 – Lower Deduction Certificate
• Upload all supporting documents
• E-verify using DSC / OTP
• Generate ARN (Acknowledgment Number)

This is the stage where most people assume the work is complete — but actually, the real process starts here.

Step 5: Physical Submission & AO Interaction (Critical Step)

In practical scenarios, especially for NRI property sale cases in Bangalore:

• Application is assigned to International Income Tax Officer
• Physical set of documents must be submitted through Tapal
• Covering letter with justification is required
• Clarifications are raised by the officer
• Follow-ups and personal visits are often required

This step is the key difference between approval and rejection.

Most online-only applications fail or get delayed here due to lack of proper representation.

Step 6: Approval of Lower TDS Certificate

Once satisfied, the Assessing Officer issues the certificate specifying:

• Approved lower TDS rate (0% / 2% / 5% etc.)
• Applicable transaction details
• Validity period

The certificate is then downloaded from TRACES and shared with the buyer.

Step 7: TDS Deduction at Lower Rate by Buyer

After receiving the certificate:

• Buyer deducts TDS at approved lower rate
• Files TDS return accordingly
• You receive higher net sale proceeds

This directly solves the issue of high TDS on property sale.

Step 8: Income Tax Filing & Refund (If Any)

Post transaction:

• File Income Tax Return (ITR)
• Claim exemptions and finalize tax liability
• Claim refund if excess TDS is deducted

With proper planning, refund dependency can be minimized or completely avoided.

Why Expert Handling Makes the Difference

Lower TDS certificate is not just a form — it is a technical representation before the Income Tax Department.

With our experience in handling lower deduction certificate (LDC) cases:

• We ensure correct tax computation and planning
• Prepare strong justification for lower TDS rate approval
• Handle AO interaction and follow-ups
• Avoid rejection and delays
• Deliver assured service with timely approval

This is why clients prefer working with a reliable local expert instead of depending only on online platforms.

Documents Required for Lower TDS Certificate on Property Sale (Form 128)

For getting a Lower Deduction Certificate (LDC) for TDS on sale of property by NRI, submitting the right documents is critical.

The Income Tax Officer verifies your actual tax liability based on these documents before approving a lower TDS rate or NIL deduction.

Incomplete or incorrect documentation is one of the main reasons for rejection or delay.

Basic Documents Required

• PAN card of the seller (mandatory)
• Passport copy (for NRI status verification)
• Aadhaar (if available)
• Contact details and address proof

Property Documents (Very Important)

• Purchase Deed of the property
• Sale Agreement / Draft Sale Deed
• Allotment letter (if applicable)
• Payment proof for property purchase
• Guidance value / stamp duty valuation

These documents establish the cost of acquisition and help compute correct capital gains.

Tax & Income Documents

• Last 3–5 years Income Tax Returns (ITR)
• Computation of income for current year
• Capital gain working (with indexation)
• Details of advance tax paid (if any)
• Form 26AS / AIS (TDS credit statement)

This is the core basis to justify your lower tax rate request.

NRI Specific Documents

• Passport with entry/exit details
• Residential status declaration
• Tax Residency Certificate (TRC) – if applicable
• DTAA declaration (if claiming benefits)

These documents help determine the correct TDS rates and tax applicability.

Buyer Details (For TDS Deduction)

• Buyer PAN (mandatory)
• Buyer TAN (if applicable)
• Sale consideration details
• Payment schedule (advance / final payment)

These details are required in Form 128 to issue the certificate specific to the transaction.

Additional Documents (As Asked by Assessing Officer)

In practical cases, the Income Tax Officer may also ask for:

• Covering letter explaining request for lower TDS certificate
• Justification for lower or NIL rate
• Proof of reinvestment (Section 54 / 54F)
• Bank statements showing transaction trail
• Case laws or supporting precedents (in complex cases)

This is where professional expertise becomes important to handle queries properly.

Checklist Before Applying for Lower TDS Certificate

• ✔ Capital gain calculation is correctly done
• ✔ All property documents are available
• ✔ ITRs and tax computations are updated
• ✔ Buyer details are confirmed
• ✔ Supporting documents are properly arranged
• ✔ Application is planned before property registration

A properly prepared application significantly increases chances of quick approval and lower TDS rate.

Common Mistakes to Avoid

• Applying without proper tax computation
• Uploading incomplete or unclear documents
• Incorrect selection in Form 128 (wrong annexure/category)
• Mismatch in PAN, property value, or buyer details
• Applying at the last moment before sale

These mistakes can lead to rejection, delay, or higher TDS deduction.

How We Ensure Smooth Approval

With our experience in handling property sale TDS and lower deduction certificate cases:

• We prepare complete documentation with proper structure
• Ensure accurate capital gain and tax calculation
• Draft strong justification for lower TDS rate
• Handle AO queries and follow-ups efficiently

This ensures faster approval and avoids unnecessary complications.

Timeline & Fees for Lower TDS Certificate (Form 128)

Understanding the timeline and cost helps you plan your property sale smoothly and avoid last-minute issues with TDS on property sale.

⏳ Timeline for Lower TDS Certificate Approval

• Application Preparation & Filing: 2–4 days
• Processing by Income Tax Officer: 15–25 days
• Total Expected Timeline: 20 to 30 days

Important: Timeline depends on documentation quality and timely response to queries raised by the Assessing Officer.

👉 We strongly recommend applying at least 15–20 days before property registration to avoid delay in transaction.

💰 Government Fees

₹0 (Nil)

There is no government fee for applying for a Lower Deduction Certificate (LDC).

💼 Professional Fees

Our professional charges depend on the complexity of the case and the level of representation required.

• Standard Cases: ₹20,000 to ₹30,000

Note:

• Lower the TDS rate requested (e.g., NIL), higher the scrutiny by Income Tax Officer
• Complex cases (high value property, exemption claims, multiple owners) require deeper analysis and follow-up

📌 Out-of-Pocket Expenses

Additional expenses may include:

• Income Tax office visits
• Physical submission (Tapal)
• Documentation handling and coordination

These will be discussed transparently and confirmed before starting the process.

Why Choose Prakasha & Co for Lower TDS Certificate?

When it comes to reducing TDS on property sale, the difference is not in filing the form — but in getting it approved correctly and on time.

• ✔ Extensive experience in handling NRI property sale TDS cases
• ✔ Expertise in lower deduction certificate (LDC) approvals
• ✔ Strong understanding of capital gain tax planning
• ✔ Direct coordination with Income Tax Department
• ✔ Handling of AO queries, follow-ups & clarifications
• ✔ Assured service delivery with timely execution

We don’t just apply — we ensure your lower TDS certificate is approved with the right rate.

Get Started – Reduce Your Property Sale TDS Now

If you are planning to sell property and want to reduce TDS legally, start the process early.

📞 Call / WhatsApp: 7019827351
📧 Email: crp@prakashaandco.com

Subject line (for quick response):
“LDC required for property sale”

Our team will review your case and guide you with the best possible lower TDS rate solution.

Sample Lower TDS Certificate (Form 128) – For Reference

Below is a sample format of a Lower TDS Certificate issued by the Income Tax Department for property sale transactions:

This certificate typically includes:

• Name and PAN of the seller
• Approved lower TDS rate (0% / 2% / 5% etc.)
• Details of property transaction
• Validity period for the certificate
• Applicable section under Income Tax Act (Form 128)

Once this certificate is issued, the buyer will deduct TDS only at the approved lower rate instead of the standard 13%–15%.

Note: The actual certificate is issued digitally through the TRACES portal and may vary based on case-specific approval.

⚡ Need Lower TDS Certificate Urgently? (10 Days Fast Track Process)

Are you an NRI visiting India for a short time and your property deal is already finalized?

This is one of the most common situations we handle:

• Property buyer is ready for registration
• Buyer insists on deducting high TDS (13%–15%)
• You are in India only for a few days
• No time to wait for normal LDC processing

In such cases, we provide a Fast Track Lower TDS Certificate service — within 7 to 10 days.

🚀 How Our Quick LDC Process Works

We take your case on high priority and directly coordinate with the International Income Tax Division (Bangalore) to expedite the approval.

• Priority filing of Form 128 (Lower TDS Certificate)
• Immediate preparation of tax computation & documents
• Direct submission to Income Tax Office (Tapal)
• Personal follow-up and visit with Assessing Officer
• Fast clarification handling and approval tracking

This ensures your certificate is approved within your visit timeline.

📄 Simple Requirements – You Just Share

To start the fast-track process, you only need to provide:

• Agreement to Sell / Draft Sale Agreement
• PAN card copy
• NRI status proof (Passport copy)

That’s it — our CA team will handle the entire process end-to-end.

🧾 Complete Support – All in One Place

We provide not just Lower TDS Certificate, but complete support for your property transaction:

• ✔ Lower TDS Certificate (Form 128 approval)
• ✔ TDS filing compliance by buyer (Form 27Q / 26QB)
• ✔ Income Tax Return (ITR) filing
• ✔ TDS refund processing (if applicable)
• ✔ Capital gain tax planning & exemption guidance
• ✔ Property document verification by in-house legal team

👉 Property legal verification support: Property Lawyer in Bangalore

No need to coordinate with multiple consultants — everything is handled at one place.

🔗 Important Links for Reference

• Income Tax TRACES Portal: https://traces.tdscpc.gov.in/
• New Income Tax Law (2026) Overview: View Details

📞 Start Your Fast Track LDC Process

If your property deal is already fixed and you need urgent lower TDS approval:

📞 Call / WhatsApp: 7019827351
📧 Email: crp@prakashaandco.com

Subject line:
“Urgent LDC required for property sale”

We will prioritize your case and ensure quick approval within your timeline.

FAQs – Lower TDS Certificate for Property Sale (NRI Sellers)

Below are the most common questions asked by NRI property sellers regarding Lower TDS Certificate (LDC), TDS on property sale, and the complete process.

1. How many days does it take to get a Lower TDS Certificate?

Normally, it takes 20 to 30 days depending on documentation and Assessing Officer review.

In urgent cases, we provide a fast-track process within 7 to 10 days by prioritizing submission and direct follow-up with the Income Tax Office in Bangalore.

2. Is Lower TDS Certificate legal and approved by Income Tax Department?

Yes, completely legal. It is issued under the Income Tax Act (now through Form 128) and allows deduction of tax at a lower or NIL rate based on your actual tax liability.

This is a standard and approved process used widely by NRIs and taxpayers.

3. What is the total cost for getting Lower TDS Certificate?

• Government Fees: ₹0 (Nil)
• Professional Fees: ₹20,000 to ₹30,000
• Out-of-pocket expenses: Based on actual Income Tax office visits and coordination

All costs are clearly discussed before starting the process.

4. Do you assist in TDS refund if excess tax is deducted?

Yes. We provide complete support for:

• Income Tax Return (ITR) filing
• Claiming TDS refund
• Follow-up for refund processing

Our goal is to minimize or eliminate refund dependency through proper planning.

5. What if Income Tax Officer raises objection or query?

We handle it completely.

• Drafting replies to queries
• Submitting additional documents
• Personal follow-up with Assessing Officer

This is where expert handling makes a major difference in approval.

6. What if TDS is already deducted but property deal is cancelled?

In such cases:

• TDS cannot be reversed by buyer directly
• You need to file Income Tax Return to claim refund

We assist in complete refund process and documentation support.

7. What details are required to determine correct lower TDS rate?

We analyze the following:

• Property purchase cost and documents
• Proposed sale value
• Capital gain calculation
• Exemption plans (Section 54 / 54F)
• Previous income and tax records

Based on this, we determine whether 0%, 2%, 5% or other lower TDS rate can be applied.

8. Do you handle Form 26QB / TDS filing for buyer?

Yes. We assist with:

• Correct TDS deduction as per certificate
• Filing of applicable TDS forms (Form 27Q / 26QB as applicable)
• Compliance with Income Tax rules

This ensures the transaction is fully compliant.

9. Do you assist in TDS payment and remittance process?

Yes. We guide and assist the buyer in:

• Correct TDS calculation
• Timely payment to government
• Filing of TDS returns

This avoids penalties and compliance issues.

10. Will you coordinate with my property broker / lawyer?

Yes. We regularly coordinate with:

• Property brokers
• Legal advisors
• Buyers and their tax consultants

This ensures smooth execution of the property transaction.

11. Are you based in Bangalore?

Yes. We are based in Bangalore and regularly handle cases with the International Income Tax Office.

This local presence is important because physical submission and follow-up are often required.

12. Why not apply online directly?

While Form 128 is filed online, approval is not automated.

• Applications are manually reviewed
• Supporting documents must be justified
• Physical submission (Tapal) is often required
• Follow-ups with Assessing Officer are necessary

Only online submission without expert handling often leads to delay or rejection.

13. How many cases have you handled?

We have handled multiple Lower TDS Certificate cases for NRI property sales and other income categories.

Our experience helps in achieving correct lower TDS rate approval with minimal delays.

14. Do you provide complete end-to-end service?

Yes, complete support in one place:

• Lower TDS Certificate (Form 128)
• TDS compliance and filing
• Capital gain tax planning
• Income Tax Return filing
• Refund processing
• Property document verification

No need to depend on multiple consultants.

15. How do I get started?

Simply contact us with basic details:

• Agreement to sell (if available)
• PAN copy
• NRI status (passport copy)

📞 Call / WhatsApp: 7019827351
📧 Email: crp@prakashaandco.com

Subject: “LDC required for property sale”

We will review your case and guide you with the best possible solution.

further FAQ on Lower TDS Certificate (LDC)

About the Author

Sreedhara S is a tax professional at Prakasha & Co., Bangalore, specializing in NRI property taxation, Lower TDS Certificate (Form 128), and capital gains advisory.

He has extensive experience in handling cases with the International Income Tax Office, assisting NRI clients in reducing TDS on property sale and ensuring smooth end-to-end compliance including TDS filing, ITR, and refund processing.

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