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APPLICATION UNDER SECTION 395(1) OF THE INCOME-TAX ACT, 2025 FOR A CERTIFICATE OF LOWER OR NIL DEDUCTION OF TAX ON THE TRANSFER OF IMMOVABLE PROPERTY BY A NON-RESIDENT, TOGETHER WITH A TAX DEDUCTION UNDERTAKING AND INDEMNITY BETWEEN THE SELLER AND THE BUYER

Executed at __________ on __________.

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PART A — STATEMENT OF FACTS, COMPUTATION AND VERIFICATION IN SUPPORT OF FORM No. 128
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To
The Assessing Officer (International Taxation),
__________.

Subject: Application in Form No. 128 under section 395(1) of the Income-tax Act, 2025 read with Rule 213 of the Income-tax Rules, 2026, for a certificate authorising deduction of tax at a lower rate, or no deduction of tax, on the consideration payable for the transfer of the immovable property described in Schedule I below. Permanent Account Number __________. Financial year __________.

Madam or Sir,

1. THE APPLICANT

1.1 I, __________, __________ of __________, holding Permanent Account Number __________ and passport __________, am __________, and I am a non-resident within the meaning of the Income-tax Act, 2025 for the financial year __________. I am referred to in this document as the Seller.

1.2 My address outside India is __________. I may be reached by electronic mail at __________ and by telephone on __________, and I consent to service of every notice and order in this proceeding at that electronic mail address.

1. THE BUYER, WHO IS THE PERSON RESPONSIBLE FOR DEDUCTION

2.1 __________, __________ of __________, holding Permanent Account Number __________ and residing at __________, is the intending purchaser of the property described in Schedule I and will be the person responsible for deducting tax at source on the consideration. That person is referred to in this document as the Buyer.

2.2 The Buyer's Tax Deduction and Collection Account Number __________. A certificate under section 395(1) operates in favour of a named deductor, and the Buyer has undertaken in Part B of this document to communicate the number to me and to this office within seven days of its allotment if it has not already been communicated, and to make no payment of consideration before that number exists.

1. THE PROPERTY, THE SELLER'S SHARE IN IT, AND THE PROPOSED TRANSFER

3.1 I am in possession of the __________ more particularly described in Schedule I, situated in __________, __________, bearing __________ and admeasuring __________. My interest in it is __________, and the share held and to be transferred by me is __________ of that property.

3.2 Where I hold less than the whole, this application, the computation in Schedule II and the certificate sought relate to my share alone. Every other co-owner is a separate assessee, must make a separate application in Form No. 128 under his or her own Permanent Account Number, and the consideration and the gain are apportioned between us according to our respective shares. The names and shares of the other co-owners are stated in Schedule I.

3.3 I acquired my share in the said property by __________ on __________, at a cost of acquisition of __________. Documentary evidence of the acquisition is enclosed at Schedule III.

3.4 By an agreement to sell dated __________, the said property was agreed to be sold to the Buyer for a total consideration of __________ for the whole of it, of which __________ is attributable to my share. The value of the whole of the said property computed at the Collector rate notified for the revenue estate in which it lies is __________, of which __________ is attributable to my share. The sale deed is expected to be executed and presented for registration on or about __________.

3.5 The consideration attributable to my share is to be paid through banking channels and credited to my Non-Resident Ordinary account __________ maintained with __________. No part of it is to be paid in cash, by traveller's cheque or in foreign currency notes, in conformity with the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and paragraph 3.3 of Reserve Bank of India FED Master Direction No. 12/2015-16 on the acquisition and transfer of immovable property.

1. WHY A CERTIFICATE IS SOUGHT

4.1 On a purchase from a non-resident seller, the obligation of the person responsible for payment is to withhold tax on the whole sum paid, and not merely on the income embedded in that sum, unless a certificate under section 395(1) directs otherwise. The concessional deduction of one per cent that applies where the seller is resident in India has no application to this transaction, and neither the Buyer nor I intend to proceed on that footing.

4.2 On this transaction the difference is decisive. The consideration payable to me is __________, whereas the income chargeable to tax in my hands is the estimated __________ of __________, computed in Schedule II. Tax withheld on the gross consideration would exceed by a very wide margin the tax that will finally be found payable, and the excess would be recoverable only by way of refund after my return of income for the financial year __________ has been filed and processed. That is money locked up for the better part of two years, in a currency in which I do not live, and it serves no revenue purpose.

4.3 I therefore apply for a certificate authorising deduction of tax at __________, computed upon the estimated __________ set out in Schedule II and not upon the gross consideration.

1. UNDERTAKINGS AND DISCLOSURES GIVEN WITH THIS APPLICATION

5.1 I undertake to file a return of income for the financial year __________ disclosing this transfer and the resulting capital gain, whether or not any further tax is finally found payable.

5.2 I undertake to inform this office in writing, before the sale deed is executed, of any change in the consideration, in the expected date of completion, or in the identity of the Buyer, and to make a fresh application where the certificate issued no longer fits the transaction.

5.3 I state that, to the best of my knowledge and belief, the said property is not the subject of any attachment, prohibitory order, provisional attachment or outstanding demand under the Income-tax Act, 2025 or under the Income-tax Act, 1961.

5.4 To the best of my knowledge and belief, for the financial year __________ and apart from the capital gain disclosed in this statement, I have __________.

5.5 I undertake to produce the originals of every document listed in Schedule III for inspection, and to attend before this office in person or through my authorised representative as and when required.

SCHEDULE I — THE PROPERTY

All that __________ bearing __________, admeasuring __________, situated in __________, __________, and more particularly described as follows:

__________

The share of the Seller in the property so described is __________.

SCHEDULE II — COMPUTATION OF THE ESTIMATED CAPITAL GAIN ON THE SELLER'S SHARE

(a) Full value of the consideration agreed for the whole of the property: __________
(b) Value of the whole of the property computed at the Collector rate for the revenue estate: __________
(c) Share held and transferred by the Seller: __________
(d) Consideration attributable to the Seller's share: __________
(e) Collector rate value attributable to the Seller's share: __________
(f) Value adopted for the Seller's share, being the higher of (d) and (e) above: __________
(g) Date of acquisition of the Seller's share: __________
(h) Mode of acquisition: __________
(i) Cost of acquisition of the Seller's share: __________
(j) Nature of the gain arising: __________
(k) Estimated gain chargeable to tax in the Seller's hands: __________
(l) Rate of deduction applied for: __________

A detailed working of the above computation, showing the apportionment of each figure to the Seller's share, showing indexation where claimed, and showing the arithmetic by which the estimated gain has been arrived at, is filed with this statement.

SCHEDULE III — DOCUMENTS ENCLOSED

1. Copy of the Seller's PAN card.
2. Copy of the Seller's passport, including the pages showing entries into and departures from India relevant to residential status, and of the Overseas Citizen of India card where held.
3. Copy of the title deed, allotment letter or other document evidencing acquisition on __________.
4. Copy of the agreement to sell dated __________.
5. Copy of the jamabandi or fard where the property lies in a revenue estate, or the allotment and transfer record of the Estate Office where it is a sector property.
6. Collector rate notification or valuation showing __________ for the whole of the property.
7. Where the Seller holds less than the whole, the document establishing the Seller's share, and the Permanent Account Numbers of the other co-owners with the number of the application filed by each.
8. Bills and vouchers in support of the cost of acquisition and, where claimed, of improvement and transfer expenditure.
9. Copy of the Seller's return of income for the preceding financial year, or a statement that none was required.
10. Bank statement of the Non-Resident Ordinary account __________ with __________.
11. Copy of the Buyer's PAN and of the Buyer's Tax Deduction and Collection Account Number or the acknowledgement of the application for it.
12. Computation working sheet supporting Schedule II.
13. Where an exemption or treaty relief is claimed, the supporting documents and, in the case of treaty relief, a Tax Residency Certificate.
14. Where this application is pursued through an attorney, a copy of the authenticated power of attorney.

VERIFICATION

I, __________, the Seller named above, do hereby solemnly declare that what is stated in Part A of this document and in the Schedules to it is true to the best of my knowledge and belief, that the documents enclosed are true copies of their originals, and that nothing material has been concealed. I understand that this statement is furnished in support of an application in Form No. 128 filed electronically under section 395(1) of the Income-tax Act, 2025 read with Rule 213 of the Income-tax Rules, 2026, and that a false statement in it carries consequences under the law.

Verified at __________ on __________.

____________________________
__________
Applicant and Seller
Permanent Account Number __________

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PART B — TAX DEDUCTION UNDERTAKING AND INDEMNITY
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THIS UNDERTAKING AND INDEMNITY is made on __________ at __________

BETWEEN

__________, __________ of __________, __________, holding Permanent Account Number __________ and passport __________, residing at __________, hereinafter called the SELLER, of the ONE PART;

AND

__________, __________ of __________, holding Permanent Account Number __________, residing at __________, hereinafter called the BUYER, of the OTHER PART.

The expressions SELLER and BUYER include, wherever the context admits, their respective heirs, executors, administrators, legal representatives and permitted assigns.

WHEREAS by an agreement to sell dated __________ the property described in Schedule I was agreed to be sold to the Buyer for a total consideration of __________ for the whole of it, of which __________ is payable to the Seller in respect of the Seller's share, the sale deed being expected to be executed on or about __________;

AND WHEREAS the Seller is a non-resident, with the consequence that the Buyer is by law the person responsible for deducting tax at source on the consideration payable to the Seller and is answerable to the Income-tax Department for that deduction irrespective of any arrangement between the parties;

AND WHEREAS the Seller has applied, or is about to apply, in Form No. 128 under section 395(1) of the Income-tax Act, 2025 read with Rule 213 of the Income-tax Rules, 2026 for a certificate authorising deduction at __________;

AND WHEREAS the parties consider it necessary to record in writing how the deduction is to be made, when it falls due, when any sum withheld is to be released, and who is to bear the consequence of an error;

NOW THIS UNDERTAKING AND INDEMNITY WITNESSES as follows.

1. THE BUYER'S DEDUCTION OBLIGATION

1.1 The Buyer acknowledges that the Seller is a non-resident, that the concessional one per cent deduction applicable to a purchase from a resident seller does not apply to this transaction, and that the Buyer must therefore obtain a Tax Deduction and Collection Account Number before making any payment of consideration.

1.2 The Buyer shall, if it has not already done so, apply for and obtain that number and shall communicate it in writing to the Seller and to the Assessing Officer (International Taxation), __________, within seven days of allotment. The Buyer acknowledges that the certificate applied for cannot be issued until a Tax Deduction and Collection Account Number exists against which to issue it, and that any delay in obtaining it is at the Buyer's risk as to time.

1.3 The Buyer shall not make any payment of the consideration attributable to the Seller's share to any person other than the Seller, and shall pay only by way of transfer through banking channels into the Non-Resident Ordinary account __________ maintained with __________.

1. DEDUCTION WHERE THE CERTIFICATE HAS BEEN ISSUED

2.1 Where, before a payment of consideration falls due, a certificate under section 395(1) has been issued in respect of this transaction and remains in force, the Buyer shall deduct tax at the rate and on the base specified in that certificate and at no higher rate.

2.2 The Buyer shall verify the certificate electronically before acting upon it and shall retain a printed copy of the verification with the transaction file.

2.3 The Buyer acknowledges that a certificate is valid only to the end of the financial year in which it is issued. Where the sale is not completed within the financial year __________, the Buyer shall not act upon a lapsed certificate, and the Seller shall apply afresh.

1. DEDUCTION WHERE NO CERTIFICATE HAS BEEN ISSUED

3.1 Where a payment of consideration falls due and no certificate under section 395(1) is then in force, the Buyer shall deduct tax at the rate prescribed by law for a payment to a non-resident, computed on the whole of the sum paid and not on the gain embedded in it. For a long-term capital gain on immovable property the base rate is 12.5 per cent with effect from 23 July 2024, plus the applicable surcharge and health and education cess; the surcharge slab turns on the amount of the consideration, and the Buyer shall take advice on the slab applicable to this consideration before making the first payment. The Buyer shall not accept any instruction from the Seller to deduct less.

3.2 The Seller acknowledges that the Buyer's obligation in clause 3.1 is a statutory one, that the Buyer cannot be asked to waive or reduce it on the strength of the Seller's own computation, and that a deduction so made gives the Seller no claim against the Buyer of any kind.

1. DEPOSIT, RETURN AND CERTIFICATE OF DEDUCTION

4.1 The Buyer shall deposit the tax deducted to the credit of the Central Government by the seventh day of the month following the month of deduction, and by the thirtieth day of April where the deduction is made in the month of March.

4.2 The Buyer shall furnish the quarterly statement of deduction in respect of payments to a non-resident in Form 27Q for the quarter in which the deduction falls, within the time prescribed, correctly quoting the Seller's Permanent Account Number __________ and, where a certificate has been acted upon, its number.

4.3 The Buyer shall issue to the Seller the certificate of deduction in Form 16A within the time prescribed after the due date for the relevant Form 27Q, and shall deliver it to the Seller by electronic mail at __________.

4.4 The Buyer shall correct any defect, mismatch or short reporting in a statement filed under clause 4.2 within thirty days of becoming aware of it, so that the credit reaches the Seller's tax credit statement.

1. THE SELLER'S OBLIGATIONS

5.1 The Seller shall file the application in Form No. 128 without delay, shall answer every query of the Assessing Officer within the time allowed, and shall keep the Buyer informed in writing of the progress of the application, including the issue, refusal, modification or cancellation of the certificate, within three working days of the event.

5.2 The Seller shall furnish to the Buyer a copy of the certificate immediately upon its issue, and shall not represent to the Buyer that a certificate has been issued unless it has.

5.3 The Seller shall disclose this transfer in the return of income for the financial year __________ and shall not claim credit for any tax that has not in fact been deducted and deposited.

1. WHEN THE DEDUCTION FALLS DUE, AND RETENTION PENDING THE CERTIFICATE

6.1 The parties intend that the sale deed will be executed only after the certificate is in hand. Where, however, the parties agree to complete before the certificate is issued, the Buyer shall deduct in accordance with clause 3.1 at the time of each payment, and the Seller's remedy in respect of the excess so deducted lies in a refund claimed in the return of income and not against the Buyer.

6.2 The parties record that the obligation to deduct arises at the time of payment or credit, whichever is earlier, and not on the day a certificate arrives. No arrangement between them postpones the date on which the deduction or the deposit falls due, and nothing in this clause entitles the Buyer to retain any sum after the deduction and deposit required by law have been made in full.

1. INDEMNITY BY THE SELLER

7.1 The Seller shall indemnify the Buyer and keep the Buyer indemnified against all tax, interest, penalty, fee and reasonable professional costs that the Buyer may be required to bear by reason of any statement made by the Seller in Part A of this document, in Form No. 128, or in support of either of them, being false or incomplete, or by reason of the cancellation, modification or withdrawal of a certificate acted upon by the Buyer in good faith.

7.2 The indemnity in clause 7.1 extends to a demand raised on the Buyer for short deduction where the shortfall arises from a certificate obtained on a misstatement by the Seller, and to interest and fee for late deduction or late deposit caused by the Seller's delay in answering a query or in communicating the outcome of the application. It survives the execution and registration of the sale deed and the delivery of possession.

7.3 The Seller shall reimburse any amount payable under this clause within thirty days of a written demand accompanied by a copy of the order or notice giving rise to it.

1. INDEMNITY BY THE BUYER

8.1 The Buyer shall indemnify the Seller and keep the Seller indemnified against all loss, interest and reasonable professional costs suffered by the Seller by reason of the Buyer failing to deduct at the time the deduction fell due, failing to deposit within time any tax actually deducted, failing to file Form 27Q correctly, failing to issue Form 16A, quoting an incorrect Permanent Account Number, or deducting at a rate higher than that permitted by a certificate then in force.

8.2 Where a credit for tax deducted does not appear in the Seller's tax credit statement because of anything done or omitted by the Buyer, the Buyer shall take every step necessary to have it corrected at the Buyer's own cost.

1. REPATRIATION AND FOREIGN EXCHANGE

9.1 The Buyer acknowledges that the Seller will seek to repatriate the net proceeds through an Authorised Dealer Category-I bank, and shall furnish to the Seller, on request and without charge, copies of the payment advices, the challans evidencing deposit of the deducted tax and the certificate in Form 16A, being the documents that the Authorised Dealer will require.

9.2 The parties record that repatriation runs by one of two different routes and that the ceilings are not the same. Where the property was acquired in foreign exchange remitted through banking channels or out of Non-Resident External or Foreign Currency Non-Resident (Bank) balances, the sale proceeds may be repatriated under paragraph 8.2 of Reserve Bank of India FED Master Direction No. 12/2015-16, and in the case of residential property that route is restricted to not more than two such properties. Where the property was acquired with rupee funds, including funds in a Non-Resident Ordinary account or property inherited or received as a gift in India, repatriation runs instead under the remittance-of-assets route in Reserve Bank of India FED Master Direction No. 13/2015-16, subject to the ceiling of one million United States dollars per financial year, and the two-property restriction has no application to it. All instalments of one sale should be routed through the same Authorised Dealer. The Buyer gives no assurance whatever as to repatriation by either route.

1. NOTICES

10.1 A notice under this document is validly given if sent by electronic mail to __________ in the case of the Seller and to the address of the Buyer at __________ by registered post or courier, and in either case is deemed received on the third working day after despatch. A notice to the Seller by post may additionally be sent to __________, and the Seller may also be contacted on __________.

1. GOVERNING LAW AND FORUM

11.1 This document is governed by the laws of India. Subject to clause 11.2, the courts at __________ shall have jurisdiction over any dispute arising out of it.

11.2 Nothing in clause 11.1 restricts the right of either party to pursue a statutory remedy before the Income-tax authorities, or the right of the Seller as a non-resident to approach any court or forum specially designated for matters concerning non-resident Indians.

1. GENERAL

12.1 This document may be executed in counterparts, and the Seller and the Buyer may sign separate counterparts in different countries; the counterparts together constitute one instrument.

12.2 This document records the whole of the understanding between the parties on the subject of deduction of tax at source on this transaction, and supersedes anything said or written on that subject before it.

12.3 Nothing in this document varies the agreement to sell dated __________ except in relation to deduction of tax at source, nor does it create, declare, assign, limit or extinguish any right, title or interest in the property described in Schedule I.

SCHEDULE IV — THE BUYER'S COMPLIANCE CHECKLIST

The following steps are the Buyer's and cannot be delegated to the Seller. Tick each as it is done and keep the evidence for at least eight years.

1. Where the property is in the Union Territory of Chandigarh, do this before anything else: ask at the Estate Office, Town Hall Building, Sector 17-C whether the Estate Officer's public notice effective 10 February 2023 still stops transfers and changes of ownership of residential property outside its four permitted categories. A certificate about withholding cannot make a transfer possible that the Estate Officer will not sanction.
2. Confirm in writing, before any payment, that the Seller is a non-resident, and keep the passport pages and the Seller's declaration on the file.
3. Apply for and obtain a Tax Deduction and Collection Account Number. Do this at the agreement stage, not at the registration counter.
4. Obtain and verify the certificate under section 395(1) before making any payment; retain the verification printout.
5. Deduct at the certified rate where a valid certificate exists, and on the gross consideration where it does not. Deduct at the time of payment or credit, whichever is earlier — a sum parked in escrow has not been deducted.
6. Deposit the deducted tax by the seventh of the following month, and by the thirtieth of April for a March deduction, quoting the Tax Deduction and Collection Account Number and not the Permanent Account Number.
7. File Form 27Q for the relevant quarter, quoting __________ and the certificate number, and check the processing status afterwards.
8. Issue Form 16A to the Seller and send it to __________.
9. Deduct separately on each instalment of consideration where the price is paid in parts, including on any advance paid before this document was signed.
10. Where there is more than one non-resident seller, deduct separately on the sum paid to each, against the certificate issued to that seller and no other.
11. Retain the challans, the statements, the certificate and this document together, because a demand for short deduction can arrive years later and the Buyer, not the Seller, is the person it will be addressed to.
12. Where the property is in the Union Territory of Chandigarh, complete the Estate Office formalities and the affidavit pack before registration, since mutation is auto-triggered from the Sub-Registrar and there is no later window in which to correct the papers. Where the property is in Punjab, report the acquisition to the patwari of the halqa for mutation after registration.

EXECUTION

IN WITNESS WHEREOF the parties have signed this document on the date and at the place first written above, having read and understood its contents.

SIGNED by the SELLER

____________________________
__________
__________ of __________
Permanent Account Number __________
Passport __________

SIGNED by the BUYER

____________________________
__________
__________ of __________
Permanent Account Number __________

IN THE PRESENCE OF THE FOLLOWING WITNESSES

Witness 1

Signature: ____________________________
Name: __________
Address: __________
Identity document number: ____________________________

Witness 2

Signature: ____________________________
Name: __________
Address: __________
Identity document number: ____________________________

NOTE ON EXECUTION OUTSIDE INDIA

Where the Seller signs outside India, the signature and the attestation by the witnesses should be made before an Indian Consul or Vice-Consul at the Indian Mission, or before a Notary Public of the place of signing with an apostille, as permitted by section 33(1)(c) of the Registration Act, 1908. Find out the stamp denomination for Part B from the Sub-Registrar's counter BEFORE the paper leaves India, and buy the e-stamp certificate in a party's name, because the signed document must be stamped in India within three months of its first receipt here under section 18 of the Indian Stamp Act, 1899, and a document that spends that window in the post while somebody hunts for the figure is a document that cannot be produced in evidence.