Are you an NRI selling property in India? Learn how Form 128 helps obtain a Lower TDS Certificate, reduce tax deduction, claim DTAA benefits, and save lakhs in blocked funds.
The good news? You can apply for a Lower TDS Certificate through Form 128 and legally reduce the TDS deduction based on your actual tax liability.
Also based on DTAA, you can claim lower rate benefits available for the said transactions.
What is Form 128?
Under the Income-tax Act, 2025, Form 128 is the prescribed application for obtaining a Lower or Nil TDS Certificate.
Once approved by the Income Tax Department, the buyer deducts TDS at the lower rate mentioned in the certificate instead of deducting tax on the full sale consideration.
Example – How NRIs Save Tax
Property Sale Value: ₹5 Crore, Actual Capital Gain: ₹50 Lakh
Without Form 128: TDS may be deducted on ₹5 Crore
With Form 128: TDS can be deducted only on the estimated tax liability
Result: Better cash flow and lower refund dependency.
Who Should Apply?
Form 128 is highly beneficial for:
✔ NRIs selling residential property in India
✔ NRIs selling commercial property
✔ Joint property owners
✔ NRIs claiming exemption under capital gains provisions
✔ NRIs eligible for DTAA benefits
✔ Sellers with high indexed cost of acquisition
Benefits of Lower TDS Certificate
✅ Avoid excess TDS deduction
✅ Improve cash flow
✅ Faster property transactions
✅ Lower tax refund delays
✅ Better compliance with Indian tax laws
Can NRIs Claim DTAA Benefits?
Yes. NRIs may be eligible to claim relief under applicable DTAA provisions and reduce their overall tax burden.
Common Mistakes NRIs Make
❌ Applying too late for Lower TDS Certificate
❌ Incorrect capital gains calculation
❌ Ignoring DTAA benefits
❌ Incomplete documentation
❌ Non-compliance with FEMA regulations
❌ Delayed response to Income Tax notices
Why Professional Assistance Matters
A properly planned transaction can help NRIs:
- Reduce TDS legally
- Avoid tax disputes
- Maximise capital gains exemptions
- Ensure FEMA compliance
- Repatriate sale proceeds smoothly
Need Help with Form 128?
Abhangi & Abhangi LLP assists NRIs worldwide
For professional assistance, visit:
Visit: www.abhangiandabhangi.com