What Form 128 Is Used For
Form 128 is the application you submit to get a certificate that allows your payer to deduct tax at a lower or nil rate. It covers TDS income types including interest, commission, professional fees, rent, and contract payments. For TCS, it applies where tax is collected at source on specified transactions.
Under the Income Tax Act 2025, Form 128 replaces old Form 13. It is filed electronically and operates under sections 395(1) and 395(3). The certificate, once issued, is shared directly with your payer through the system.
Form 128 Need to be file in TRACE Portal when:
- Tax deducted at standard rates will exceed your actual tax liability for the year
- Your net income after deductions falls below or near the basic exemption limit
- You receive payments from multiple payers across TDS or TCS categories
- You are a registered non-profit or specified entity eligible for reduced deductions
- You are a business or professional expecting lower net profit than the previous year
Must Be Correct Before You Submit Form 128
Check these before uploading anything:
- PAN must match your TRACES profile exactly
- TAN of each payer must be filled in the correct annexure (Annexure I for TDS, Annexure III for TCS)
- Estimated income and tax calculation must cover the full tax year, not just months elapsed
- Last 4 years of ITR, audit reports, and financial statements must be ready if the system requests them
- Advance tax paid and TDS/TCS credits must be accurately declared to avoid calculation mismatch
- If payer count exceeds 100 and details are not yet available, use Annexure II for a child certificate
Can I submit Form 128 partway through the tax year?
Yes. You can file it at any point during the tax year for which you need the certificate. There is no fixed window. File early to cover more of the year’s payments.
Does Form 128 cover TCS as well as TDS?
Yes. Annexure I and III separate TDS and TCS applications. Fill only the one that applies to your situation. If both apply, complete both annexures in the same filing.
What does my payer do after the certificate is issued?
The certificate details appear on TRACES for your payer automatically. They are then required to deduct or collect tax at the approved rate for all payments covered under the certificate during its validity period.
For a step-by-step filing walkthrough, documents checklist, and error guide, Read the complete Form 128 guide
RELATED FORMS
Form 121 for TDS exemption on FD interest — If you have fixed deposit interest income and want to stop TDS on it, submit this to your bank separately. The TDS already deducted can then be reported in Part C(3) of Form 122.
Form 13 is the official application used by EPFO to transfer an employee’s Provident Fund account from one establishment to another when they change jobs
Form 122 is a consolidated income declaration submitted by a salaried employee to their current employer. It replaces the earlier Form 12B and Form 12BAA .