Form explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Form No. 129 is the application a payer makes to the Assessing Officer when it believes that only part of a payment to a non-resident is chargeable to tax, so that tax is deducted only on that part. The form asks for details of the payer and payee, the remittance, the taxability under the Act or under a tax treaty, and the documents relied on. This guide explains the form as printed in the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026.
Under rule 214, an application by a person for determining the appropriate proportion of a sum chargeable in the case of a non-resident recipient under section 395(2) or section 400(3) is made in Form No. 129. The Assessing Officer examines the taxability under the Act read with any Double Taxation Avoidance Agreement and issues a certificate for tax deduction under section 393(2) (Table, serial number 17). The certificate is valid only for the payment to the non-resident named in it and for the period specified, and a fresh application may be made after expiry or "within three months before the expiry".
The sections and the rule
Section 395(2) of the Income-tax Act, 2025 lets the person responsible for paying a non-resident a sum covered by section 393(2) (Table, serial number 17) apply to the Assessing Officer, in the prescribed form and manner, where he considers that the whole of the sum would not be chargeable in the recipient's hands. The Assessing Officer determines the appropriate proportion chargeable, and tax is then deducted only on that proportion. Section 400(3) allows the Board to notify classes of persons or cases in which a payer may make such an application, for sums whether or not chargeable under the Act. The sections are covered in section 395 on lower TDS certificates and sections 396 to 401. Which classes the Board has notified is not stated in the text consulted.
Rule 214 is the prescribed procedure, and it is explained in rule 214 on the appropriate proportion of a non-resident payment. Under sub-rule (3) the Assessing Officer takes into account, for the recipient, the tax payable on the estimated income of the relevant tax year, the tax payable on the assessed, returned or estimated income of the preceding four tax years, existing liability under the Act and "the Income-tax Act, 1961 (43 of 1961) (as it existed prior to its repeal)" (quoted as the rule prints it), and advance tax, tax deducted at source and tax collected at source for the relevant tax year up to the date of application or issue of the certificate. The certificate is valid only for the payment to the non-resident named in it and for the stated period of the tax year, unless cancelled earlier (sub-rule (4)); a fresh application can follow expiry or be made within three months before it (sub-rule (5)).
If you are about to remit a payment abroad and are unsure how much of it is taxable, our NRI tax filing team can help you gather the facts and prepare the application.
What the form asks
| Part | What it asks |
|---|---|
| A: Particulars of the payer and payee | Payer: name, address, PAN, Tax Deduction and Collection Account Number, status, residential status, email ID, contact number. Payee: name, PAN if available (Note 5 refers to section 397(2)(c) and rule 217 where there is no PAN), Tax Identification Number in the country of residence, address in India, country of residence, address there, email ID, contact number |
| B: Particulars of transaction | Country to which the remittance is made; details of remittances (royalty, fees for technical services, dividend, interest, business income, capital gains or any other) with amount in foreign currency and rupees and proposed date of payment; the tax year for which the certificate is requested; whether the payment is net of taxes and tax would be grossed up under section 393(10); previous certificates under section 395(2) for the same transaction; tax payable on the recipient's estimated income; prepaid taxes (advance tax, TDS, TCS); existing liabilities under the Act and under the old Act as printed; whether a Double Taxation Avoidance Agreement applies |
| C: Taxability under the Act (if no agreement applies) | Whether the payment is chargeable to tax in India; if not, reasons; if yes, the details by type of payment (below) |
| D: Taxability under the agreement | The agreement applicable; whether a tax residency certificate and Form No. 41 are enclosed; and details by type of payment (below) |
| E: Attachments | Nine descriptions of attachments, with a declaration by the payer's authorised signatory |
If the answer on the agreement is yes, Part D is filled; if no, Part C.
Parts C and D by type of payment
| Type | Part C asks | Part D adds |
|---|---|---|
| A. Business income | Nature of business; description of the business connection in India; amount chargeable; section, rate of deduction, tax liability | Whether liable to tax in India under the agreement; reasons if not; nature of permanent establishment if yes; the Article, rate under the agreement and tax liability |
| B. Capital gains | Nature and location of the asset; long-term and short-term gains with dates, sale consideration, cost of acquisition and improvement; section, rate and tax liability | Whether taxable under the agreement; reasons if not; asset details, gains, Article, rate and tax liability |
| C. Royalty | Nature of royalty from seven listed descriptions of consideration; amount chargeable; section, rate and tax liability | Whether the recipient is the beneficial owner; whether attributable to a permanent establishment; whether liable under the agreement; reasons; nature, amount, rate and tax liability |
| D. Fees for technical services | Managerial, technical or consultancy services; amount chargeable; section, rate and tax liability | Beneficial owner; permanent establishment; whether taxable under the agreement; where not taxable, the questions on a "Make Available" clause and any Most Favored Nation claim; where taxable, the nature, amount, rate and tax liability |
| E. Interest | Nature of interest income; whether conditions of section 393(2) (Table, serial number 5), of section 393(2) (Table, serial numbers 6 and 7) and 393(4) (Table, serial number 13), and of section 393(2) (Table, serial numbers 2, 3 and 4) are satisfied; Loan Registration Number given by the Reserve Bank of India; amount, section, rate and tax liability | Beneficial owner; permanent establishment; whether liable to tax in India; reasons or the nature, amount, rate and tax liability |
| F. Other payments | Nature of payment; amount chargeable; section, rate and tax liability | Nature; whether taxable under the agreement; reasons with the Article, or the Article, rate and amount |
The Loan Registration Number refers to a Reserve Bank of India process; check that law and its directions separately.
Part E: attachments
The nine descriptions are: contracts and computation papers (sale of goods or services, capital gains computation, share purchase agreement, bank payment, cost of acquisition, contract note, share certificate); the assessed, returned or estimated income of the payee for the preceding four tax years if available; a computation of estimated income chargeable to tax and tax liability for the tax year; a copy of the tax residency certificate and Form No. 41; documents in support of the claim under the cited serial numbers of section 393; a note on business connection in India; a detailed note on why the payment is not taxable under the Act or the agreement; a detailed note on how the amount chargeable out of the total payment has been determined, with working and documents; and any other supporting documents. The declaration states that the information is true and correct and that no relevant information has been concealed. Notes 7 and 8 say that some information is pre-filled and amounts are in rupees.
An example
Delmar Software India Private Limited plans to pay a foreign group company a sum that includes a software licence fee and reimbursement of costs. It believes only part is chargeable to tax in India. It applies in Form No. 129, fills the payer and payee particulars, selects royalty and any other payment in Part B, answers Yes to the agreement question, and fills Part D, items C and F, with the tax residency certificate and Form No. 41. Part E carries a note on how the chargeable amount was worked out. The certificate it receives is valid only for that payee and period; Delmar applies for a fresh one within three months before expiry.
Need help with a payment to a non-resident?
The application depends on the nature of each payment, the treaty position and the supporting working. Our NRI tax filing team can help you structure the application and assemble the attachments before you remit.
Key takeaways
- Form No. 129 is the payer's application under section 395(2) or 400(3), made under rule 214.
- It leads to a certificate for tax deduction on only the chargeable proportion of the payment.
- Part C is filled where no agreement applies; Part D where one does.
- The certificate is valid only for the named payee and the stated period; a fresh application may be made after expiry or within three months before it.
- The classes of cases under section 400(3) are not stated in the text consulted.
Read next
- Form Nos. 154 to 159: tax clearance undertaking, applications and certificates for persons leaving India
- Form No. 145: information for payments to non-residents
- Form No. 146: accountant's certificate for payments to non-residents
- Form No. 162: annual statement of a liaison office of a non-resident
Disclaimer: Based on the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026, as consulted on 4 October 2026. It explains the words of the forms and rules only; later notifications, the forms and utilities on the e-filing portal, circulars and the way the tax authorities apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.