Tax deducted at source is calculated on a payment, not on your profit. That is fine when the two are close, and expensive when they are not. Section 395 of the Income-tax Act, 2025 is the fix: it lets the person receiving the income ask the Assessing Officer to certify a lower rate, or no deduction at all, before the payment is made.
Starting at
₹4,999 onwards
LDC (Form 128)
Contractors, professionals, loss-making entities, non-residents
Timeline
Filed in 2-5 working days; certificate typically 2-6 weeks
A lower tax deduction certificate, often shortened to LDC or LTDC, is a written authorisation issued by an Assessing Officer under Section 395(1) of the Income-tax Act, 2025. The statute sets out a three-step logic: under Section 395(1)(a) the payee applies to the Assessing Officer; under Section 395(1)(b) the officer, on being satisfied that the payee's total income justifies it, issues the certificate; and the payer then deducts at the certified rate. Section 395(3) does the same for tax collected at source.
Selling property as a resident? The buyer's side is the property TDS statement. For other certificates signed by a Chartered Accountant, see CA certificates.
Section 395(1)
Empowers the Assessing Officer to certify a lower or nil rate of deduction. Section 395(3) does the same for tax collected at source.
Form No. 128
The application form, which replaced Form No. 13 from 1 April 2026. Filed electronically on TRACES only - there is no offline route and it cannot be filed without a PAN.
Rule 213
Income-tax Rules, 2026. Prescribes Form No. 128 and the manner of application, absorbing the old Rules 28, 28AA, 28AB, 29, 37G and 37H.
Form No. 121
The self-declaration route under Section 393(6), which replaced Forms 15G and 15H. It goes to the payer and needs no approval, but is open only to eligible resident individuals and certain non-company entities.
Section 395(5)
The Assessing Officer may cancel the certificate after giving reasons - which is what happens if the income estimate was understated.
Form No. 128 is optional. File it whenever the tax being deducted from you is meaningfully larger than the tax you will actually owe.
Three routes exist and they are not interchangeable. Picking the wrong one costs either time or money.
Form No. 128 shows only the declarations and annexures relevant to your category. Picking the wrong one is a common cause of rework.
01
We compute estimated total income and tax for the Tax Year and work out the defensible rate to ask for, rather than asking for nil and inviting a query. Where any of the last four years' returns are missing, a computation for those years is prepared first.
02
The TAN of each payer for Annexure-I, or Annexure-III for TCS. Where payers are likely to exceed 100 and their details are not yet known, Annexure-II is used instead.
03
Form No. 128 is filed at www.tdscpc.gov.in under the correct applicant category, with Parts A to F completed and supporting documents uploaded. E-verification produces an Acknowledgement Receipt Number, and the application can be withdrawn any time before it is processed.
04
The Assessing Officer may raise clarifications - this stage, not the filing, is what usually determines how long the certificate takes. Once issued we download it and distribute it to every payer it covers.
Upload via our secure portal. We pre-check every scan before filing - cuts portal rejections by ~90%.
Still unsure if LDC (Form 128) is right for your case? Talk to our team and we will walk you through your specifics.
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