Form 128 for a foreign company that wants less tax withheld

Form 128 was Form 13. The note maps it from section 197 and section 206C(9) to section 395(1) and section 395(3), and from the old Rules 28, 28AA, 28AB, 29, 37G and 37H to Rule 213.

It is the application for a certificate that authorises the payer to deduct tax at a lower rate or at nil, or to collect tax at a lower rate. Any person, resident or non-resident, who wants that certificate can file it. The income the note names includes interest, commission, professional fees, contract payments, rent and other income that is subject to deduction.

This is the payee's form. If the Indian customer is the one asking the officer to split a single remittance into a taxable part and a non-taxable part, that application is Form 129.

The documents the note lists start with the PAN of the applicant. A foreign company that does not have one applies on Form 96, which the PAN note describes as the form for an entity incorporated outside India. An individual who is not an Indian citizen applies on Form 95. Those were Form 49AA, split by the new rules into Form 95 and Form 96.

The note also asks for the payer's details, including TAN, where Annexure I or III applies; the estimated income and tax for the period; and, if required, the last four years' returns, audit reports and financial statements, plus advance tax and TDS or TCS credits already available.

The form is filed on TRACES. The note says it may be filed any time in the tax year for which the certificate is sought. Once issued, the certificate is valid for the period stated on it, or until the officer modifies or withdraws it. The payer is told, in the same note, to apply the rate on the certificate and to change the rate when the certificate is modified, withdrawn or expired. The payer can verify the certificate on TRACES.

The note does not publish a rejection table. The conditions it does spell out are the ones that stop the certificate being used: no PAN on the application, no estimate of income and tax, a certificate that names payers the applicant has not listed (unless the child-certificate route for more than 100 deductors applies), and a payer that keeps using a rate after the certificate has ended.

The child-certificate route in the note is for the case where the people who will deduct are likely to exceed 100 and are not known when you apply. The certificate can then be issued in the applicant's name, authorising the applicant to receive the payments at the approved rate and to generate the certificate for each deductor.

This page does not state how many days an officer takes. The note does not give that number.