Reduce TDS on Property: Form 128 Under New IT Act

Taxation

Last updated: Jun 16, 2026

3 min read

by Team Axis Bank

India’s tax playbook just got a little more interesting, especially if you are selling property or expecting some income where you hope the Tax Deducted at Source (TDS) should be less (or even zero) than standard.

The Income Tax Act, 2025 (effective April 1, 2026) changed how you can request lower or no TDS. It looks like the old Form 13 is no longer needed.

If you are someone who has been waiting to sell a house, lease a space, or transfer some payment and wondered whether you could cut a little lesser tax at source, here’s your cheat sheet.

Out with old, in with new: Meet form 128

Under the earlier tax regime (based on the 1961 Act), taxpayers used Form 13 to request a lower or nil TDS certificate from the Income Tax Department. If you were selling property and didn’t want your buyer to deduct a big chunk of tax, this was your go‑to form.

There is a new form called Form 128 that will be used instead of that one when the Income-tax Act, 2025 takes effect on April 1, 2026. Think of it as the classic TDS request form getting a modern makeover with a new number and some streamlined requirements.

Why is this good news? What you are still asking for is a certificate telling the payer to take out less or no tax from your payment. Some of the paperwork has been made easier, though.

What’s actually changed?

Here’s the fun part: while the purpose of the form hasn’t changed, a couple of notable tweaks make your life a bit easier, or at least less cluttered:

Less manual uploading
In the older Form 13, you had to upload full income tax returns for the last four years as part of the form. With Form 128, you only need to fill in basic return details like the acknowledgment number, date of filing, taxable income, and liability for those four years.
Payer details simplified
Earlier, you could provide the payer’s TAN, PAN, or Aadhaar number. Now, Form 128 asks only for the payer's TAN or PAN.

So how does the new process work?

Before you say, "Yay, no TDS!" and take a deep breath, keep in mind that Form 128 can still be applied for the time being in the usual way.

Here’s what you typically do:

File Form 128 online on the tax department’s e‑filing portal
An Assessing Officer checks your credentials
If approved, you get a certificate indicating the lower or nil TDS rate
You pass this certificate to the payer
They then deduct TDS at that rate

What about auto‑certificates for small taxpayers?

In the Union Budget 2026, there were hints that, in the future, small taxpayers might be able to automatically receive lower or no TDS certificates, based on set rules, without having to fill out an application.

But the current draft of Form 128 does not yet show a special ‘auto’ button for that purpose; it’s possible that this will be introduced through separate notifications or rules after the law comes into force.

For now, filing by hand is still the norm; there is just a new form name and fewer steps.

Conclusion

Form 128 is the same old request for TDS relief. It just has a new look and less stuff. This new process is meant to make it a little faster and easier to ask that no or less tax be withheld at the source if you have property to sell or income that normally has TDS withheld.

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