Selling Your Mumbai Flat as an NRI? Apply for a Lower TDS Certificate Before You Sign

NRI selling a Mumbai flat? A lower TDS certificate under section 395 (Form 128, formerly Form 13) can cut what the buyer withholds. How and when to apply.

A corridor leading to a bedroom inside a Mumbai apartment

When an NRI sells a flat in Mumbai, the buyer has to deduct TDS on the sale price, not on your actual profit. On a flat you bought years ago at a much lower price, that can mean lakhs of rupees held back that you'll only get back after filing a return and waiting for the refund.

There's a better way, and most NRI sellers we meet haven't heard of it: a lower (or nil) TDS certificate.

What is a lower TDS certificate?

It's a certificate from the Income Tax Department that tells the buyer to deduct TDS at a lower rate, based on your actual expected tax. Under the Income-tax Act, 2025, it's issued under section 395(1), which replaced the old section 197 from 1 April 2026. The application form is now Form 128, which replaced Form 13 (TaxAj).

Who applies, and where?

You apply, not the buyer. The person receiving the money is the applicant.
Online on TRACES. The application goes electronically to your jurisdictional assessing officer.
No fee is charged for the application.

The buyer deducts TDS on your sale price, not your profit. A lower TDS certificate brings it back in line with what you actually owe.

What documents do I need?

Your sale agreement or draft agreement
Purchase documents and proof of cost, plus records of any improvements
Previous years' returns and tax computations
A computation of the expected capital gains

How long is it valid?

For the tax year it's issued for, or a shorter period if the certificate says so. It names the buyer (the deductor), so a buyer who isn't named can't rely on it. And it only applies to payments made after it's issued; it doesn't refund TDS already deducted. That's why timing matters: apply as soon as you have a buyer and a draft agreement, before the token is paid.

Is it worth the effort?

Usually, yes, when the gap between the sale price and your gain is large. Every rupee held back as excess TDS is a rupee you can't use until your refund comes through. For the full picture of the tax on the sale itself, see my post on capital gains tax for NRIs selling a Mumbai flat.

How we help

We've sold flats for NRI owners in Singapore and London, with every document ready before the signing, as you can see on our Owners' Wall. For the tax side, we work alongside your chartered accountant so the lower TDS certificate, the buyer's deduction and the repatriation paperwork line up with the sale dates.

Frequently asked questions

What replaced Form 13 for lower TDS?

Form 128, under section 395 of the Income-tax Act, 2025, from 1 April 2026.

Can the buyer apply for the lower TDS certificate?

No. The seller, who receives the money, applies.

Is an old section 197 certificate still valid?

A certificate issued under the old law remains valid for the period it covers.

Related reading

Planning to sell from abroad? Book a video call and we'll map out the timeline.

Warmly,
Yanik

General information, not tax advice. Work with a chartered accountant on your application.

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