Why it helps
TDS is a prepayment of tax. When it's deducted at a rate higher than the eventual liability — because margins are thin, losses are brought forward, or only a small part of a receipt is income — the excess is locked up until the return is processed. A certificate avoids that by telling deductors the right rate up front.
It is most valuable for NRIs selling property, where buyers otherwise deduct on the full price.
Documents required
- Returns and computations for the last few years.
- Estimated income and tax for the current year.
- Details of the deductors and the expected payments.
- For property: sale agreement and cost details.
How we handle it
Estimate the liability
Income and tax for the year, supported by records.
File Form 128
With the computation and documents.
Respond to the AO
Answer queries and provide further documents.
Share the certificate
Deductors apply the certified rate.
When a certificate is worth applying for
| Situation | Why TDS overshoots |
|---|---|
| NRI selling property | Buyers deduct on the full price instead of the gain |
| Contractor with thin margins | TDS on gross receipts exceeds tax on profit |
| Company with carried-forward losses | No tax payable this year, but TDS deducted on receipts |
| Professional with high expenses | TDS on fees exceeds the tax on net income |
How the Assessing Officer decides
The Assessing Officer looks at the tax paid and returns filed in earlier years, the estimated income and tax for the current year, and any outstanding demands. A clean compliance history and a well-supported estimate are what get a certificate issued quickly.
Practical notes from our engagements
- Applied for too late. It only helps for payments made after it's issued.
- Estimates without support. The AO needs evidence for the projected income.
How we handle lower TDS certificates
We prepare a supported estimate of the year's tax, file Form 128 early, and follow up with the Assessing Officer.
Related services
Frequently asked questions
What replaced Form 13?
Form 128, under Section 395 of the Income-tax Act, 2025, from 1 April 2026.
Who can apply for a lower TDS certificate?
Any person whose income is subject to TDS and whose actual tax liability justifies a lower or nil rate.
Can an NRI apply?
Yes. It's most commonly used by NRIs selling property.
How long is the certificate valid?
For the financial year and deductors it specifies.
Does the deductor need to do anything?
Deduct at the rate in the certificate and quote it in their TDS statement.
Does an outstanding tax demand affect the application?
It can. The Assessing Officer considers existing liabilities when deciding the rate.
Can the certificate cover several deductors?
Yes, the certificate specifies the deductors and amounts it applies to.