{"id":861,"date":"2026-08-13T11:16:58","date_gmt":"2026-08-13T11:16:58","guid":{"rendered":"https:\/\/guardia.co\/blogs\/?p=861"},"modified":"2026-08-18T04:46:43","modified_gmt":"2026-08-18T04:46:43","slug":"lower-deduction-certificate-nri-property-sale","status":"publish","type":"post","link":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/","title":{"rendered":"How to Get a Lower Deduction Certificate (LDC) for NRI Property Sale in 2026"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/guardia.co\/sell-property-service\">Selling a property in India as a Non-Resident Indian (NRI)<\/a> can involve a significant TDS deduction from the sale proceeds. When an NRI sells immovable property in India, the buyer generally has to deduct tax before making the relevant payment or credit to the seller.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The amount deducted at source can sometimes be higher than the seller&#8217;s actual final tax liability. When that happens, the excess amount may remain blocked until the seller files an Income Tax Return and claims the eligible refund.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A <strong>Lower Deduction Certificate (LDC)<\/strong> may help reduce this upfront tax deduction where the taxpayer&#8217;s estimated tax liability supports a lower or nil deduction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From <strong>1 April 2026<\/strong>, the provisions for lower or nil deduction certificates are governed by <strong>Section 395(1) of the Income-tax Act, 2025<\/strong>. The taxpayer applies electronically using <strong>Form 128 under Rule 213 of the Income-tax Rules, 2026<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this guide, you&#8217;ll learn:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>What a Lower Deduction Certificate is<\/li>\n\n\n\n<li>Why an NRI property seller may need one<\/li>\n\n\n\n<li>Who can apply<\/li>\n\n\n\n<li>What information and supporting documents may be required<\/li>\n\n\n\n<li>How to apply using Form 128 through TRACES<\/li>\n\n\n\n<li>How the Income Tax Department processes the application<\/li>\n\n\n\n<li>How long the process may take<\/li>\n\n\n\n<li>What happens after the certificate is issued<\/li>\n\n\n\n<li>What buyers need to do after deducting TDS<\/li>\n\n\n\n<li>Important 2026 TDS changes<\/li>\n\n\n\n<li>Common mistakes to avoid<\/li>\n\n\n\n<li>Frequently asked questions about LDCs<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What Is a Lower Deduction Certificate (LDC)?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A <strong>Lower Deduction Certificate (LDC)<\/strong> is a certificate issued by the Income Tax Department that authorises tax to be deducted at a rate lower than the otherwise applicable rate, or at nil rate where permitted.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under the Income-tax Act, 2025, the corresponding provision is <strong>Section 395(1)<\/strong>. The taxpayer applies electronically using <strong>Form 128 under Rule 213 of the Income-tax Rules, 2026<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Income Tax Department considers the taxpayer&#8217;s estimated income and tax liability, along with other relevant information, before determining whether a lower or nil deduction is justified.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An LDC <strong>does not reduce your actual tax liability<\/strong>. It only affects the amount of tax deducted at source during the relevant payment or credit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your final tax liability is determined separately when you file your Income Tax Return.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">2026 transition from the old law<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before 1 April 2026, lower or nil deduction certificates were issued under <strong>Section 197 of the Income-tax Act, 1961<\/strong>, generally through Form 13.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From 1 April 2026, the corresponding provision is Section 395(1) of the Income-tax Act, 2025 and the application is made using Form 128.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A certificate issued under Section 197 of the Income-tax Act, 1961 <strong>may remain valid<\/strong> for payments or credits made on or after 1 April 2026 where it was issued in respect of projected receivables for <strong>Tax Year 2026-27<\/strong>, subject to the certificate&#8217;s terms, validity period and applicable transition provisions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why Do NRIs Need a Lower Deduction Certificate?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">When an NRI sells immovable property in India, the buyer generally has to deduct TDS under the provisions applicable to payments to non-residents.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For consideration paid or credited in connection with the transfer of immovable property to a non-resident, the relevant provision is generally <strong>Section 393(2), Table Serial No. 17<\/strong>, subject to the facts of the transaction and the applicable law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The buyer is responsible for deducting TDS, but the buyer does not ordinarily determine the seller&#8217;s final capital gains tax liability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This can create a situation where the TDS deducted is higher than the seller&#8217;s actual tax liability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, the seller may have:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A relatively low taxable capital gain<\/li>\n\n\n\n<li>Eligible capital gains exemptions<\/li>\n\n\n\n<li>A significant cost of acquisition<\/li>\n\n\n\n<li>Eligible improvement expenses<\/li>\n\n\n\n<li>Tax credits or advance tax already paid<\/li>\n\n\n\n<li>Other circumstances that reduce the final tax payable<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Without an LDC, excess TDS may need to be recovered through the Income Tax Return and refund process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An LDC may allow tax to be deducted closer to the seller&#8217;s estimated tax liability, improving cash flow during the transaction.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How Does an LDC Benefit an NRI Property Seller?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A Lower Deduction Certificate primarily helps with <strong>cash flow<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Instead of having a larger amount withheld and waiting for a refund later, the seller may receive a larger portion of the sale proceeds upfront if the certificate is approved.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some potential benefits include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Lower TDS deduction where justified<\/li>\n\n\n\n<li>Better cash flow after the property sale<\/li>\n\n\n\n<li>Reduced amount of excess TDS that may otherwise need to be claimed as a refund<\/li>\n\n\n\n<li>TDS that more closely reflects the estimated tax liability<\/li>\n\n\n\n<li>Greater clarity for the buyer and seller regarding the applicable TDS rate<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">However, an LDC does not eliminate or reduce the seller&#8217;s final tax liability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the final tax liability is higher than the TDS deducted, the seller will still have to pay the balance tax while filing the Income Tax Return.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Lower Deduction Certificate vs Standard TDS<\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Without an LDC<\/strong><\/td><td><strong>With a valid LDC<\/strong><\/td><\/tr><tr><td>TDS is deducted under the applicable law.<\/td><td>TDS may be deducted at the rate authorised in the certificate.<\/td><\/tr><tr><td>A larger amount may be withheld upfront.<\/td><td>More of the sale proceeds may be available immediately.<\/td><\/tr><tr><td>Excess tax may have to be claimed through the ITR and refund process.<\/td><td>The amount of excess TDS may be reduced.<\/td><\/tr><tr><td>Cash flow may be affected.<\/td><td>Cash flow may improve.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The rate authorised in an LDC depends on the taxpayer&#8217;s circumstances and the determination made by the Income Tax Department. Issuance of an LDC and the authorised rate are not guaranteed merely because an application is submitted.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Who Should Consider Applying for an LDC?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Applying for an LDC is optional. It may be worth considering when the TDS likely to be deducted is substantially higher than the seller&#8217;s estimated final tax liability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You may consider an LDC where:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Your estimated capital gains tax is lower than the expected TDS.<\/li>\n\n\n\n<li>You are eligible for a capital gains exemption and satisfy its conditions.<\/li>\n\n\n\n<li>You are selling inherited property and the resulting taxable gain is relatively low.<\/li>\n\n\n\n<li>You have substantial eligible acquisition or improvement costs.<\/li>\n\n\n\n<li>You have tax credits or advance tax already paid.<\/li>\n\n\n\n<li>You want to avoid waiting for a substantial tax refund.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Every transaction is different, so the estimated capital gains and tax liability should be calculated before deciding whether an LDC is appropriate.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Who Can Apply for an LDC?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">For an NRI property sale, the <strong>seller\/payee whose income is subject to TDS can apply<\/strong> for a lower or nil deduction certificate under Section 395(1).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The taxpayer applies electronically using <strong>Form 128<\/strong>. Many NRIs choose to work with a Chartered Accountant because the application requires a proper tax computation and supporting information.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you live outside India, you may also authorise a representative or Power of Attorney (PoA) holder in India to assist with documentation and coordination, where appropriate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A separate payer-side mechanism<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Income-tax Act, 2025 also contains a separate mechanism under <strong>Section 395(2)<\/strong> for a payer to seek a determination of the appropriate proportion of a payment to a non-resident that is chargeable to tax.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under <strong>Rule 214 of the Income-tax Rules, 2026<\/strong>, such an application is made using <strong>Form 129<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is different from the seller&#8217;s Form 128 application and should not be confused with it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Is a Lower Deduction Certificate Mandatory?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">No. Obtaining an LDC is <strong>not mandatory<\/strong>. If you do not apply for one, the buyer must deduct TDS according to the applicable provisions of the Income-tax Act, 2025. If the TDS deducted is higher than your final tax liability, you may generally claim the eligible excess through your Income Tax Return and refund process.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Documents and Supporting Information for Form 128<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Applying for a Lower Deduction Certificate requires information about your estimated income, tax liability and the relevant transaction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The exact information and supporting documents can vary depending on the taxpayer and transaction. The Income Tax Department may also ask for additional clarification or documents during processing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Form 128 application should generally be supported by the relevant tax computations and explanations required under the applicable rules and departmental guidance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Core tax information<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Depending on the circumstances, this may include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Estimated total income and tax liability for the relevant tax year.<\/li>\n\n\n\n<li>Income computations for preceding tax years where the relevant return was not filed.<\/li>\n\n\n\n<li>A note explaining exempt income excluded from total income, where applicable.<\/li>\n\n\n\n<li>Details of tax already paid.<\/li>\n\n\n\n<li>TDS\/TCS credits available.<\/li>\n\n\n\n<li>Payer\/buyer details relevant to the proposed payment.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Transaction-specific supporting documents<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Depending on the transaction, you may also need:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Purchase deed or previous acquisition documents.<\/li>\n\n\n\n<li>Proposed sale agreement or draft sale deed.<\/li>\n\n\n\n<li>Documents supporting the cost of acquisition.<\/li>\n\n\n\n<li>Bills and records for eligible improvement expenses.<\/li>\n\n\n\n<li>Documents supporting capital gains exemptions, where applicable.<\/li>\n\n\n\n<li>Property-related records, where relevant.<\/li>\n\n\n\n<li>Details of the buyer and proposed sale consideration.<\/li>\n\n\n\n<li>Other documents requested by the Assessing Officer.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Important<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Documents such as a passport, Aadhaar, Encumbrance Certificate or property tax receipts should <strong>not be treated as universally mandatory Form 128 documents<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They may be useful or requested depending on the circumstances of the transaction, but the exact supporting documents can vary.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Providing complete and consistent information can help reduce unnecessary clarification requests.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to Apply for a Lower Deduction Certificate<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Under the Income-tax Act, 2025, a taxpayer seeking a lower or nil deduction certificate applies electronically using <strong>Form 128<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The process generally involves the following steps.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Step 1: Calculate Your Estimated Tax Liability<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before applying, calculate the estimated tax liability arising from the property sale.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The calculation may consider:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sale consideration<\/li>\n\n\n\n<li>Cost of acquisition<\/li>\n\n\n\n<li>Cost of eligible improvements<\/li>\n\n\n\n<li>Holding period and applicable capital gains provisions<\/li>\n\n\n\n<li>Eligible exemptions<\/li>\n\n\n\n<li>Tax already paid<\/li>\n\n\n\n<li>TDS\/TCS credits<\/li>\n\n\n\n<li>Other relevant income and tax adjustments<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The accuracy of this computation is important because the Income Tax Department considers the taxpayer&#8217;s estimated tax position when determining whether a lower or nil deduction is justified.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Step 2: Gather Your Supporting Information<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Collect the relevant tax and property documents before submitting Form 128.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Make sure:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Property details match the sale documents.<\/li>\n\n\n\n<li>The buyer&#8217;s information is accurate.<\/li>\n\n\n\n<li>The estimated sale consideration is correct.<\/li>\n\n\n\n<li>The capital gains computation is supported by documents.<\/li>\n\n\n\n<li>Tax credits and advance tax details are correctly reported.<\/li>\n\n\n\n<li>Uploaded documents are clear and legible.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">If the Department requests additional information, respond within the prescribed time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Step 3: Submit Form 128 Through TRACES<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The taxpayer applies electronically using <strong>Form 128 under Rule 213<\/strong> for a certificate authorising lower or nil deduction under <strong>Section 395(1)<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The filing is completed through the <strong>TRACES portal<\/strong> using the prescribed online process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The current filing flow is:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Log in to TRACES \u2192 Dashboard \u2192 e-File and View \u2192 File Forms \u2192 Form No. 128<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Complete the application, provide the required information, upload the supporting documents, <strong>e-verify the form and submit it<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The application may require information such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Name and PAN<\/li>\n\n\n\n<li>Residential status<\/li>\n\n\n\n<li>Estimated income<\/li>\n\n\n\n<li>Estimated tax liability<\/li>\n\n\n\n<li>Details of the payment<\/li>\n\n\n\n<li>Payer\/buyer details<\/li>\n\n\n\n<li>Tax already paid or available as credit<\/li>\n\n\n\n<li>Relevant supporting information<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Before submitting, carefully check the figures and supporting documents.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Any material discrepancy between the application and the supporting records may result in clarification requests or delay processing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Note:<\/strong> Portal menus and navigation may change over time. If the interface differs, follow the current Form 128 instructions displayed on the Income Tax Department\/TRACES portal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Step 4: Review by the Income Tax Department<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After submission, the application is processed through the Income Tax Department&#8217;s system and may be reviewed by the Assessing Officer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Department may consider factors such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Tax payable on estimated income for the relevant tax year.<\/li>\n\n\n\n<li>Tax position in preceding tax years.<\/li>\n\n\n\n<li>Existing tax liabilities.<\/li>\n\n\n\n<li>Advance tax already paid.<\/li>\n\n\n\n<li>TDS\/TCS credits available.<\/li>\n\n\n\n<li>Estimated income from the relevant transaction.<\/li>\n\n\n\n<li>Supporting documents and information submitted.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The Department may request additional information or clarification if required.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Responding promptly to such requests can help avoid unnecessary delays.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Step 5: Issue of the Lower Deduction Certificate<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the application is approved, the Income Tax Department issues a certificate specifying the applicable lower or nil deduction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The certificate may specify:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The authorised deduction rate.<\/li>\n\n\n\n<li>The relevant payment or payer.<\/li>\n\n\n\n<li>The period for which the certificate is valid.<\/li>\n\n\n\n<li>Any applicable conditions.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The seller should carefully check the certificate once it is issued.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The certificate should be made available to the buyer\/deductor before the relevant TDS deduction is made.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The buyer may apply the rate authorised in the certificate <strong>subject to the certificate&#8217;s validity, conditions and the applicable law<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Long Does It Take to Receive an LDC?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">There is <strong>no fixed statutory processing timeline<\/strong> that guarantees when a Lower Deduction Certificate will be issued.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The actual processing time can depend on:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Completeness of the application.<\/li>\n\n\n\n<li>Accuracy of the tax computation.<\/li>\n\n\n\n<li>Supporting documents provided.<\/li>\n\n\n\n<li>Previous tax information.<\/li>\n\n\n\n<li>Existing tax liabilities.<\/li>\n\n\n\n<li>Whether additional clarification is requested.<\/li>\n\n\n\n<li>Departmental processing.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For this reason, sellers should not plan a property transaction around an assumed processing period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Practical tip<\/strong>:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Apply sufficiently in advance of the expected <strong>payment or credit<\/strong> so that the certificate is available before the buyer is required to deduct TDS.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Can You Apply After the Property Sale?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">An LDC is intended to determine the rate of TDS <strong>before the relevant tax deduction takes place<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the buyer has already deducted and deposited TDS on a payment, a subsequently issued certificate generally cannot undo the deduction already made.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If excess tax has already been deducted, the seller may generally need to claim the eligible excess through the Income Tax Return and refund process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The key timing point is therefore the <strong>payment or credit that triggers TDS<\/strong>, rather than simply the date on which the sale deed is registered.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Important 2026 Update: Buyer-Side TDS Compliance<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The buyer&#8217;s responsibilities do not end after deducting TDS.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once TDS is deducted, the buyer must:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Deposit the tax with the Income Tax Department.<\/li>\n\n\n\n<li>Complete the applicable TDS reporting requirements.<\/li>\n\n\n\n<li>Issue the prescribed TDS certificate to the seller.<\/li>\n\n\n\n<li>Correctly report the seller&#8217;s PAN and other required details.<\/li>\n\n\n\n<li>Apply the rate authorised in a valid lower deduction certificate, where applicable.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For payments to non-residents, <strong>Form 144 is the quarterly TDS statement under the 2026 framework<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Form 144 is a <strong>TDS reporting statement<\/strong>, not the TDS certificate issued to the seller.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The buyer must separately issue the prescribed TDS certificate to the seller after completing the applicable reporting requirements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Important 2026 Update: TAN Rules Change From 1 October 2026<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There is an additional change that NRI property sellers and buyers should know about.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As of August 2026, a <strong>resident individual or HUF purchasing immovable property from a non-resident<\/strong> is required to follow the existing TAN-based mechanism for TDS compliance, subject to the applicable provisions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From <strong>1 October 2026<\/strong>, the law changes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A resident individual or HUF will no longer be required to obtain a separate TAN for the specified TDS on consideration paid for the transfer of immovable property to a non-resident.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Instead, the buyer will use the buyer&#8217;s <strong>PAN-based mechanism<\/strong> and report the deduction through the prescribed process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>This is a date-sensitive procedural update. Buyers should verify the applicable form, TAN requirement and reporting mechanism on the Income Tax Department portal before making the relevant payment.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, buyers and sellers should confirm the procedure applicable to the <strong>date of the relevant payment or credit<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Happens After You Receive the Lower Deduction Certificate?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Once the Income Tax Department approves your application, carefully review the certificate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Check:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Your name and PAN.<\/li>\n\n\n\n<li>Buyer&#8217;s\/payer&#8217;s details, where applicable.<\/li>\n\n\n\n<li>Authorised TDS rate.<\/li>\n\n\n\n<li>Validity period.<\/li>\n\n\n\n<li>Any conditions attached to the certificate.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Share the certificate with the buyer before the relevant payment or credit on which TDS is required.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The buyer may then deduct TDS at the rate authorised in the valid certificate, <strong>subject to the certificate&#8217;s validity and conditions<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After deducting the tax, the buyer must complete the applicable deposit, reporting and certificate requirements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For payments to non-residents, the applicable quarterly TDS statement is <strong>Form 144<\/strong> under the 2026 framework. Form 144 is a reporting statement and should not be confused with the TDS certificate issued to the seller.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Keep a copy of the Lower Deduction Certificate and the TDS certificate for your tax records.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Does an LDC Reduce Your Tax?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>No.<\/strong> A Lower Deduction Certificate does not reduce your actual tax liability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It only affects the amount of tax deducted at source at the time of the relevant payment or credit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your final tax liability is determined when you file your Income Tax Return based on factors such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Nature of the capital gain.<\/li>\n\n\n\n<li>Cost of acquisition.<\/li>\n\n\n\n<li>Cost of eligible improvements.<\/li>\n\n\n\n<li>Applicable capital gains provisions.<\/li>\n\n\n\n<li>Eligible exemptions.<\/li>\n\n\n\n<li>Tax already paid.<\/li>\n\n\n\n<li>TDS\/TCS credits.<\/li>\n\n\n\n<li>Surcharge and cess, wherever applicable.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">If your final tax liability is higher than the TDS deducted, you may need to pay the balance tax.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If your final tax liability is lower than the tax already deducted, you may be eligible for a refund.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Think of an LDC as a way to <strong>avoid excessive tax being withheld upfront<\/strong>, not as a way to reduce the tax you ultimately owe.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Example: How an LDC May Improve Cash Flow<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Suppose an NRI is selling a residential property in India for <strong>\u20b92 crore<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Particulars<\/strong><\/td><td><strong>Amount \/ Treatment<\/strong><\/td><\/tr><tr><td>Sale Price<\/td><td>\u20b92,00,00,000<\/td><\/tr><tr><td>Estimated Tax Liability<\/td><td>Based on the seller&#8217;s tax computation<\/td><\/tr><tr><td>TDS without LDC<\/td><td>Deducted under the applicable provisions<\/td><\/tr><tr><td>TDS with LDC<\/td><td>May be deducted at the rate authorised in the certificate<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Without an LDC, the amount withheld as TDS may be significantly higher than the seller&#8217;s final tax liability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the final tax liability is lower, the seller may have to wait until the Income Tax Return and refund process to recover the excess.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If an LDC is approved, the Income Tax Department may authorise a lower rate based on the seller&#8217;s estimated tax position.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This may allow the seller to receive a larger portion of the sale proceeds upfront.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Important:<\/strong> The rate authorised in an LDC is not a standard rate for all NRI property sales. It is determined based on the facts of the individual case and the certificate issued by the Income Tax Department.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Common Mistakes to Avoid<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Many LDC applications can face delays because of incomplete information or avoidable errors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some common mistakes include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Waiting until the last minute to apply.<\/li>\n\n\n\n<li>Incorrectly calculating the estimated tax liability.<\/li>\n\n\n\n<li>Providing incomplete supporting information.<\/li>\n\n\n\n<li>Uploading unclear documents.<\/li>\n\n\n\n<li>Providing incorrect buyer\/payer details.<\/li>\n\n\n\n<li>Claiming exemptions without supporting evidence.<\/li>\n\n\n\n<li>Failing to account for tax already paid or available credits.<\/li>\n\n\n\n<li>Ignoring clarification requests from the Income Tax Department.<\/li>\n\n\n\n<li>Assuming that the buyer can simply choose a lower TDS rate without the required legal basis.<\/li>\n\n\n\n<li>Treating transaction-specific supporting documents as universally mandatory.<\/li>\n\n\n\n<li>Assuming that an LDC will automatically be approved.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">A complete and accurate application can make the process smoother.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Common Myths About Lower Deduction Certificates<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Myth<\/strong><\/td><td><strong>Reality<\/strong><\/td><\/tr><tr><td>An LDC eliminates capital gains tax.<\/td><td>An LDC only affects the amount deducted at source. Your final tax liability is determined separately.<\/td><\/tr><tr><td>Every NRI seller automatically qualifies for an LDC.<\/td><td>Each application is considered based on the taxpayer&#8217;s estimated tax position and relevant information.<\/td><\/tr><tr><td>I can apply after receiving the sale proceeds.<\/td><td>An LDC is intended to operate before the relevant TDS deduction.<\/td><\/tr><tr><td>The buyer can decide to deduct any lower rate.<\/td><td>The buyer must follow the applicable law and a valid certificate or other legally applicable determination.<\/td><\/tr><tr><td>Approval is guaranteed once Form 128 is submitted.<\/td><td>Submission does not guarantee approval. The application is subject to processing and applicable conditions.<\/td><\/tr><tr><td>Passport, Aadhaar and an Encumbrance Certificate are mandatory for every Form 128 application.<\/td><td>Supporting documents can vary depending on the transaction and taxpayer&#8217;s circumstances.<\/td><\/tr><tr><td>An LDC reduces my final tax liability.<\/td><td>It only changes the amount deducted at source.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions (FAQs)<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1786616818069\"><strong class=\"schema-faq-question\">1. What is Form 128?<\/strong> <p class=\"schema-faq-answer\">Form 128 is the prescribed application used by a taxpayer\/payee to request a lower or nil deduction certificate under <strong>Section 395(1) of the Income-tax Act, 2025<\/strong> and <strong>Rule 213 of the Income-tax Rules, 2026<\/strong>.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786616881526\"><strong class=\"schema-faq-question\">2. Is a Lower Deduction Certificate mandatory?<\/strong> <p class=\"schema-faq-answer\">No. Applying for an LDC is optional. However, without an LDC or another applicable determination, the buyer must deduct TDS according to the applicable provisions of the Income-tax Act, 2025.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786616921648\"><strong class=\"schema-faq-question\">3. Who should apply for an LDC?<\/strong> <p class=\"schema-faq-answer\">For an NRI property sale, the <strong>seller\/payee whose income is subject to TDS can apply<\/strong> for a lower or nil deduction certificate under Section 395(1).<br>A Chartered Accountant can assist with the tax computation, supporting documents and application process.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786616957937\"><strong class=\"schema-faq-question\">4. Can I apply while living outside India?<\/strong> <p class=\"schema-faq-answer\">Yes. An NRI can apply online. The seller may also authorise a Chartered Accountant or Power of Attorney holder in India to assist with documentation and coordination, where appropriate.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786617103304\"><strong class=\"schema-faq-question\">5. How long does it take to receive an LDC?<\/strong> <p class=\"schema-faq-answer\">There is no fixed statutory processing timeline guaranteeing issuance within a particular number of days or weeks. The processing time can vary depending on the application, tax computation, supporting information and whether additional clarification is required.<br>It is advisable to apply well before the expected payment or credit.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786617138197\"><strong class=\"schema-faq-question\">6. Can I apply after the buyer has deducted TDS?<\/strong> <p class=\"schema-faq-answer\">An LDC is intended to reduce TDS before the relevant deduction is made. If TDS has already been deducted and deposited, a subsequently issued certificate generally cannot undo the deduction already made.<br>Any eligible excess tax may instead need to be claimed through the Income Tax Return and refund process.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786617174487\"><strong class=\"schema-faq-question\">7. Can the buyer deduct TDS at a lower rate without an LDC?<\/strong> <p class=\"schema-faq-answer\">The buyer should not simply choose a lower TDS rate on its own. The buyer must follow the applicable provisions of the Income-tax Act, 2025 and any valid lower\/nil deduction certificate or other legally applicable determination.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786617211569\"><strong class=\"schema-faq-question\"><strong>8. Does an LDC reduce my capital gains tax?<\/strong><\/strong> <p class=\"schema-faq-answer\">No. An LDC only affects the amount deducted at source. Your final tax liability is determined separately when you file your Income Tax Return.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786617283620\"><strong class=\"schema-faq-question\">9. Can capital gains exemptions be considered while applying for an LDC?<\/strong> <p class=\"schema-faq-answer\">Yes, where the seller is legally eligible and satisfies the conditions applicable to the relevant exemption. The relevant exemption should be supported by appropriate documentation and correctly reflected in the tax computation.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786617316280\"><strong class=\"schema-faq-question\"><strong>10. What happens if my LDC application is rejected?<\/strong><\/strong> <p class=\"schema-faq-answer\">If the application is not approved, the buyer must follow the applicable TDS provisions. If more tax is ultimately deducted than your final tax liability, you may generally claim the eligible excess through your Income Tax Return and refund process.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786617362380\"><strong class=\"schema-faq-question\"><strong>11. What is the difference between Form 128 and Form 129?<\/strong><\/strong> <p class=\"schema-faq-answer\"><strong>Form 128<\/strong> is used by the payee\/taxpayer to apply for a lower or nil deduction certificate under Section 395(1).<br><strong>Form 129<\/strong> is used by the payer to apply under Section 395(2) for determination of the appropriate proportion of a payment to a non-resident that is chargeable to tax.<br>They serve different purposes.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786617397824\"><strong class=\"schema-faq-question\"><strong>12. What TDS statement does the buyer file for payments to an NRI?<\/strong><\/strong> <p class=\"schema-faq-answer\">For the 2026 framework, <strong>Form 144<\/strong> is the quarterly TDS statement for payments other than salary made to non-residents.<br>It is a reporting statement and should not be confused with the TDS certificate issued to the seller.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786617438125\"><strong class=\"schema-faq-question\"><strong>13. Does the buyer need a TAN when buying property from an NRI?<\/strong><\/strong> <p class=\"schema-faq-answer\">As of August 2026, the existing TAN requirement applies to a resident individual or HUF purchasing immovable property from a non-resident, subject to the applicable provisions.<br>From <strong>1 October 2026<\/strong>, the law changes and a resident individual or HUF will not be required to obtain TAN for the specified TDS on consideration paid for transfer of immovable property to a non-resident.<br>The buyer will instead use the prescribed PAN-based mechanism.<br>Because this is a date-sensitive procedural change, buyers should verify the applicable form and reporting mechanism with the Income Tax Department before making the relevant payment.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1786617486902\"><strong class=\"schema-faq-question\">14. Does the old Section 197 certificate remain valid after 1 April 2026?<\/strong> <p class=\"schema-faq-answer\">A certificate issued under Section 197 of the Income-tax Act, 1961 <strong>may remain valid<\/strong> for payments or credits made on or after 1 April 2026 where it was issued in respect of projected receivables for <strong>Tax Year 2026-27<\/strong>, subject to the certificate&#8217;s terms, validity period and applicable transition provisions.<\/p> <\/div> <\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Before applying for a Lower Deduction Certificate, remember:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>An LDC may reduce the amount of TDS deducted upfront where the taxpayer&#8217;s estimated tax liability justifies it.<\/li>\n\n\n\n<li>It <strong>does not reduce your final tax liability<\/strong>.<\/li>\n\n\n\n<li>From 1 April 2026, the payee&#8217;s lower\/nil deduction application is made using <strong>Form 128 under Section 395(1) and Rule 213<\/strong>.<\/li>\n\n\n\n<li>For consideration paid or credited in connection with the transfer of immovable property to a non-resident, the relevant TDS provision is generally <strong>Section 393(2), Table Serial No. 17<\/strong>, subject to the facts of the transaction and applicable law.<\/li>\n\n\n\n<li>The buyer should have the valid certificate before the relevant TDS deduction.<\/li>\n\n\n\n<li>There is no guaranteed statutory processing period, so apply well in advance.<\/li>\n\n\n\n<li><strong>Form 144<\/strong> is the quarterly TDS statement for payments other than salary made to non-residents under the 2026 framework. It is not the TDS certificate issued to the seller.<\/li>\n\n\n\n<li>From <strong>1 October 2026<\/strong>, the TAN requirement changes for specified resident individual\/HUF buyers purchasing immovable property from non-residents.<\/li>\n\n\n\n<li>If excess TDS is ultimately deducted, the seller may generally claim the eligible excess through the Income Tax Return and refund process.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Selling property in India as an NRI can involve substantial TDS deductions, but the amount deducted upfront does not necessarily represent your final tax liability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If your estimated tax liability is significantly lower than the TDS likely to be deducted, a <strong>Lower Deduction Certificate<\/strong> may help improve cash flow and reduce the amount of money blocked until the refund process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From 1 April 2026, NRI sellers seeking a lower or nil deduction certificate generally apply under <strong>Section 395(1) of the Income-tax Act, 2025 using Form 128 under Rule 213 of the Income-tax Rules, 2026<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Because the application depends on your estimated income, tax liability, previous tax information and transaction details, it is important to prepare an accurate tax computation and supporting information.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is also important for buyers and sellers to keep up with the 2026 TDS changes, including <strong>Form 144<\/strong> and the TAN-related change effective from <strong>1 October 2026<\/strong>. Since procedural requirements can change, buyers should verify the applicable process on the Income Tax Department portal based on the date of the relevant payment or credit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Every property sale has its own tax and legal circumstances. For a high-value or complex transaction, professional advice from a Chartered Accountant or tax professional can help ensure that the TDS calculation, LDC application and property sale documentation are handled correctly.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Need Help Applying for a Lower Deduction Certificate?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Applying for an LDC involves more than completing Form 128. The application may require an accurate tax computation, transaction details, tax records and supporting information.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you&#8217;re planning to sell property in India,<a href=\"https:\/\/guardia.co\" data-type=\"link\" data-id=\"https:\/\/guardia.co\"> <strong>Guardia<\/strong><\/a> can help coordinate the documentation process and connect you with experienced tax and <a href=\"https:\/\/guardia.co\/legal-services\">legal professionals<\/a> who can assist with the Lower Deduction Certificate application and the wider property sale process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Disclaimer:<\/strong> This article is intended for general informational purposes and should not be treated as tax or legal advice. Tax provisions, rules, forms and procedural requirements may change. NRIs and buyers should verify the applicable provisions for their specific transaction and seek professional advice where required.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Last reviewed: 7 August 2026<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Selling a property in India as a Non-Resident Indian (NRI) can involve a significant TDS deduction from the sale proceeds. When an NRI sells immovable property in India, the buyer generally has to deduct tax before making the relevant payment or credit to the seller. The amount deducted at source can sometimes be higher than [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":862,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","_templately_pack_id":"","_templately_imported_at":"","_templately_source":"","_templately_import_session_id":"","footnotes":""},"categories":[5],"tags":[],"class_list":["post-861","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-publish","entry","has-media"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>NRI Property Sale LDC 2026: Form 128, Documents and Process<\/title>\n<meta name=\"description\" content=\"Learn how NRIs can apply for a Lower Deduction Certificate(LDC) for property sale in India, including Form 128, TDS rules and key 2026 change\" \/>\n<meta name=\"robots\" content=\"index, follow, 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What is Form 128?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Form 128 is the prescribed application used by a taxpayer\\\/payee to request a lower or nil deduction certificate under <strong>Section 395(1) of the Income-tax Act, 2025<\\\/strong> and <strong>Rule 213 of the Income-tax Rules, 2026<\\\/strong>.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786616881526\",\"position\":2,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786616881526\",\"name\":\"2. Is a Lower Deduction Certificate mandatory?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"No. Applying for an LDC is optional. However, without an LDC or another applicable determination, the buyer must deduct TDS according to the applicable provisions of the Income-tax Act, 2025.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786616921648\",\"position\":3,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786616921648\",\"name\":\"3. Who should apply for an LDC?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"For an NRI property sale, the <strong>seller\\\/payee whose income is subject to TDS can apply<\\\/strong> for a lower or nil deduction certificate under Section 395(1).<br>A Chartered Accountant can assist with the tax computation, supporting documents and application process.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786616957937\",\"position\":4,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786616957937\",\"name\":\"4. Can I apply while living outside India?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Yes. An NRI can apply online. The seller may also authorise a Chartered Accountant or Power of Attorney holder in India to assist with documentation and coordination, where appropriate.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617103304\",\"position\":5,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617103304\",\"name\":\"5. How long does it take to receive an LDC?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"There is no fixed statutory processing timeline guaranteeing issuance within a particular number of days or weeks. The processing time can vary depending on the application, tax computation, supporting information and whether additional clarification is required.<br>It is advisable to apply well before the expected payment or credit.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617138197\",\"position\":6,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617138197\",\"name\":\"6. Can I apply after the buyer has deducted TDS?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"An LDC is intended to reduce TDS before the relevant deduction is made. If TDS has already been deducted and deposited, a subsequently issued certificate generally cannot undo the deduction already made.<br>Any eligible excess tax may instead need to be claimed through the Income Tax Return and refund process.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617174487\",\"position\":7,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617174487\",\"name\":\"7. Can the buyer deduct TDS at a lower rate without an LDC?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"The buyer should not simply choose a lower TDS rate on its own. The buyer must follow the applicable provisions of the Income-tax Act, 2025 and any valid lower\\\/nil deduction certificate or other legally applicable determination.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617211569\",\"position\":8,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617211569\",\"name\":\"8. Does an LDC reduce my capital gains tax?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"No. An LDC only affects the amount deducted at source. Your final tax liability is determined separately when you file your Income Tax Return.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617283620\",\"position\":9,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617283620\",\"name\":\"9. Can capital gains exemptions be considered while applying for an LDC?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Yes, where the seller is legally eligible and satisfies the conditions applicable to the relevant exemption. The relevant exemption should be supported by appropriate documentation and correctly reflected in the tax computation.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617316280\",\"position\":10,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617316280\",\"name\":\"10. What happens if my LDC application is rejected?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"If the application is not approved, the buyer must follow the applicable TDS provisions. If more tax is ultimately deducted than your final tax liability, you may generally claim the eligible excess through your Income Tax Return and refund process.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617362380\",\"position\":11,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617362380\",\"name\":\"11. What is the difference between Form 128 and Form 129?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"<strong>Form 128<\\\/strong> is used by the payee\\\/taxpayer to apply for a lower or nil deduction certificate under Section 395(1).<br><strong>Form 129<\\\/strong> is used by the payer to apply under Section 395(2) for determination of the appropriate proportion of a payment to a non-resident that is chargeable to tax.<br>They serve different purposes.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617397824\",\"position\":12,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617397824\",\"name\":\"12. What TDS statement does the buyer file for payments to an NRI?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"For the 2026 framework, <strong>Form 144<\\\/strong> is the quarterly TDS statement for payments other than salary made to non-residents.<br>It is a reporting statement and should not be confused with the TDS certificate issued to the seller.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617438125\",\"position\":13,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617438125\",\"name\":\"13. Does the buyer need a TAN when buying property from an NRI?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"As of August 2026, the existing TAN requirement applies to a resident individual or HUF purchasing immovable property from a non-resident, subject to the applicable provisions.<br>From <strong>1 October 2026<\\\/strong>, the law changes and a resident individual or HUF will not be required to obtain TAN for the specified TDS on consideration paid for transfer of immovable property to a non-resident.<br>The buyer will instead use the prescribed PAN-based mechanism.<br>Because this is a date-sensitive procedural change, buyers should verify the applicable form and reporting mechanism with the Income Tax Department before making the relevant payment.\",\"inLanguage\":\"en-US\"},\"inLanguage\":\"en-US\"},{\"@type\":\"Question\",\"@id\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617486902\",\"position\":14,\"url\":\"https:\\\/\\\/guardia.co\\\/blogs\\\/lower-deduction-certificate-nri-property-sale\\\/#faq-question-1786617486902\",\"name\":\"14. 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Form 128, Documents and Process","isPartOf":{"@id":"https:\/\/guardia.co\/blogs\/#website"},"primaryImageOfPage":{"@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#primaryimage"},"image":{"@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#primaryimage"},"thumbnailUrl":"https:\/\/guardia.co\/blogs\/wp-content\/uploads\/2026\/08\/How-to-get-Lower-Deduction-Certificate-For-NRI-Property-scaled.jpg","datePublished":"2026-08-13T11:16:58+00:00","dateModified":"2026-08-18T04:46:43+00:00","description":"Learn how NRIs can apply for a Lower Deduction Certificate(LDC) for property sale in India, including Form 128, TDS rules and key 2026 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Guardia"},"image":{"@id":"https:\/\/guardia.co\/blogs\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/guardia.co\/blogs\/#\/schema\/person\/500e77edcf81ad42677446e8aeedab43","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/60324ff2decc3da9c02c501176ac1c7274cc2109fbcae115152d5a4d8033f3cd?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/60324ff2decc3da9c02c501176ac1c7274cc2109fbcae115152d5a4d8033f3cd?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/60324ff2decc3da9c02c501176ac1c7274cc2109fbcae115152d5a4d8033f3cd?s=96&d=mm&r=g","caption":"admin"},"sameAs":["http:\/\/192.168.0.5\/guardia-blog"],"url":"https:\/\/guardia.co\/blogs\/author\/admin\/"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786616818069","position":1,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786616818069","name":"1. What is Form 128?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Form 128 is the prescribed application used by a taxpayer\/payee to request a lower or nil deduction certificate under <strong>Section 395(1) of the Income-tax Act, 2025<\/strong> and <strong>Rule 213 of the Income-tax Rules, 2026<\/strong>.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786616881526","position":2,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786616881526","name":"2. Is a Lower Deduction Certificate mandatory?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"No. Applying for an LDC is optional. However, without an LDC or another applicable determination, the buyer must deduct TDS according to the applicable provisions of the Income-tax Act, 2025.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786616921648","position":3,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786616921648","name":"3. Who should apply for an LDC?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"For an NRI property sale, the <strong>seller\/payee whose income is subject to TDS can apply<\/strong> for a lower or nil deduction certificate under Section 395(1).<br>A Chartered Accountant can assist with the tax computation, supporting documents and application process.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786616957937","position":4,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786616957937","name":"4. Can I apply while living outside India?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Yes. An NRI can apply online. The seller may also authorise a Chartered Accountant or Power of Attorney holder in India to assist with documentation and coordination, where appropriate.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617103304","position":5,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617103304","name":"5. How long does it take to receive an LDC?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"There is no fixed statutory processing timeline guaranteeing issuance within a particular number of days or weeks. The processing time can vary depending on the application, tax computation, supporting information and whether additional clarification is required.<br>It is advisable to apply well before the expected payment or credit.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617138197","position":6,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617138197","name":"6. Can I apply after the buyer has deducted TDS?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"An LDC is intended to reduce TDS before the relevant deduction is made. If TDS has already been deducted and deposited, a subsequently issued certificate generally cannot undo the deduction already made.<br>Any eligible excess tax may instead need to be claimed through the Income Tax Return and refund process.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617174487","position":7,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617174487","name":"7. Can the buyer deduct TDS at a lower rate without an LDC?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"The buyer should not simply choose a lower TDS rate on its own. The buyer must follow the applicable provisions of the Income-tax Act, 2025 and any valid lower\/nil deduction certificate or other legally applicable determination.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617211569","position":8,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617211569","name":"8. Does an LDC reduce my capital gains tax?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"No. An LDC only affects the amount deducted at source. Your final tax liability is determined separately when you file your Income Tax Return.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617283620","position":9,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617283620","name":"9. Can capital gains exemptions be considered while applying for an LDC?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Yes, where the seller is legally eligible and satisfies the conditions applicable to the relevant exemption. The relevant exemption should be supported by appropriate documentation and correctly reflected in the tax computation.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617316280","position":10,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617316280","name":"10. What happens if my LDC application is rejected?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"If the application is not approved, the buyer must follow the applicable TDS provisions. If more tax is ultimately deducted than your final tax liability, you may generally claim the eligible excess through your Income Tax Return and refund process.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617362380","position":11,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617362380","name":"11. What is the difference between Form 128 and Form 129?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"<strong>Form 128<\/strong> is used by the payee\/taxpayer to apply for a lower or nil deduction certificate under Section 395(1).<br><strong>Form 129<\/strong> is used by the payer to apply under Section 395(2) for determination of the appropriate proportion of a payment to a non-resident that is chargeable to tax.<br>They serve different purposes.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617397824","position":12,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617397824","name":"12. What TDS statement does the buyer file for payments to an NRI?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"For the 2026 framework, <strong>Form 144<\/strong> is the quarterly TDS statement for payments other than salary made to non-residents.<br>It is a reporting statement and should not be confused with the TDS certificate issued to the seller.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617438125","position":13,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617438125","name":"13. Does the buyer need a TAN when buying property from an NRI?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"As of August 2026, the existing TAN requirement applies to a resident individual or HUF purchasing immovable property from a non-resident, subject to the applicable provisions.<br>From <strong>1 October 2026<\/strong>, the law changes and a resident individual or HUF will not be required to obtain TAN for the specified TDS on consideration paid for transfer of immovable property to a non-resident.<br>The buyer will instead use the prescribed PAN-based mechanism.<br>Because this is a date-sensitive procedural change, buyers should verify the applicable form and reporting mechanism with the Income Tax Department before making the relevant payment.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617486902","position":14,"url":"https:\/\/guardia.co\/blogs\/lower-deduction-certificate-nri-property-sale\/#faq-question-1786617486902","name":"14. Does the old Section 197 certificate remain valid after 1 April 2026?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"A certificate issued under Section 197 of the Income-tax Act, 1961 <strong>may remain valid<\/strong> for payments or credits made on or after 1 April 2026 where it was issued in respect of projected receivables for <strong>Tax Year 2026-27<\/strong>, subject to the certificate's terms, validity period and applicable transition provisions.","inLanguage":"en-US"},"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/posts\/861","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/comments?post=861"}],"version-history":[{"count":2,"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/posts\/861\/revisions"}],"predecessor-version":[{"id":869,"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/posts\/861\/revisions\/869"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/media\/862"}],"wp:attachment":[{"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/media?parent=861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/categories?post=861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/guardia.co\/blogs\/wp-json\/wp\/v2\/tags?post=861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}