Form 121 — Non Deduction of TDS
Replaces Form 15G & 15H from April 1, 2026 | Official Gazette Notified
Guided by CA Sagar Batra
Income Tax Department · Official Source
CA Sagar Batra
Chartered Accountant & Tax Expert
1. What is Form 121 Non Deduct of TDS?
Form 121 (Form No.15G & 15H) is a unified nil TDS declaration form introduced under the Income Tax Act, 2025, effective from April 1, 2026. It officially replaces the older Forms 15G and 15H, creating a single, streamlined document for all eligible Indian residents who wish to declare their income as non-taxable and prevent TDS (Tax Deducted at Source) from being deducted at the source itself.
By submitting this form to your bank or financial institution, you instruct them not to deduct TDS on your eligible income — whether it is interest from fixed deposits, dividends, or pension income.
Previously, individuals below 60 used Form 15G and senior citizens used Form 15H. The Form 121 update under the new Income Tax Act, 2025 removes this age-based split. There is now just one standard form for everyone — simpler, digital-friendly, and more transparent.
2. Why Form 121 is Used
The primary purpose of this form is to protect your cash flow. When a bank pays you interest on a fixed deposit, it typically deducts a percentage as advance tax (TDS). If your total yearly income is not taxable, this deduction is unnecessary and forces you to wait months for a refund after filing your ITR.
By submitting Form 121 — a formal request for no TDS deduction — you receive your complete interest income immediately, avoiding both the deduction and the refund hassle entirely.
3. Who Can Apply for Form 121?
The eligibility criteria are clearly defined. The following groups can submit this TDS exemption form:
- Resident individuals — both under and above 60 years of age
- Hindu Undivided Families (HUFs)
- Specific trusts or entities with zero taxable income
Who cannot apply: Non-Resident Indians (NRIs), companies, and partnership firms are explicitly excluded from using Form 121.
| Category | Eligible? | Remarks |
|---|---|---|
| Resident Individual (below 60) | YES | Income must not exceed basic exemption limit |
| Resident Individual (60 years or above) | YES | Total tax liability must be NIL; income can exceed basic limit |
| HUF (Hindu Undivided Family) | YES | Treated similar to individuals for TDS purpose |
| Trusts / Specified entities | CONDITIONAL | Only if no taxable income; check trust deed conditions |
| NRI (Non-Resident Indian) | NO | Cannot use Form 121; subject to higher TDS rates |
| Partnership Firms | NO | Excluded under Section 393(6) |
| Companies (Pvt/Public) | NO | TDS rules apply differently; use Form 13 instead |
4. Conditions for Non-Deduction of TDS
To successfully use this nil TDS declaration form, you must satisfy all of the following conditions laid down by the Income Tax Department:
- Resident Status: You must be a resident of India during the relevant tax year.
- Zero Tax Liability: Your estimated total income tax liability for the financial year must be exactly NIL after all deductions and rebates.
- Income Limit (under 60 years): The specific income being declared (e.g., FD interest) must not exceed the basic tax exemption limit (verify current slab — approximately ₹3 lakh under the new tax regime for FY 2026-27).
- Senior Citizen Flexibility (60+): Senior citizens can declare even if interest income exceeds the basic exemption, provided their final tax computation results in NIL liability after deductions, rebates, and reliefs.
- Timely Submission: Submit the declaration before the interest or relevant income is credited to your account. Post-credit submissions will not stop TDS for that credit.
5. Eligible Income Types Under Form 121
Form 121 can be used to prevent TDS deduction on a wide range of income types. As notified under Section 393(6) of the Income Tax Act, 2025, the eligible incomes are:
| S.No. | Nature of Income | Common Source | TDS Rate (if not filed) |
|---|---|---|---|
| 1 | Interest — Bank FDs & Savings | Banks, NBFCs | 10% |
| 2 | Interest — Post Office Deposits | Post Office Schemes | 10% |
| 3 | Dividend — Domestic Companies | Equity Shares, Preference Shares | 10% |
| 4 | Mutual Fund Units Income | AMCs, Specified Undertakings | 10% |
| 5 | Interest — Securities & Bonds | Corporate Bonds, Govt. Securities | 10% |
| 6 | Insurance Policy Payouts | LIC, Private Insurers | 5% |
| 7 | EPF/PF Withdrawals | EPFO (under specific conditions) | 10% |
| 8 | Commission — Insurance | Insurance Agents | 5% |
| 9 | Rent — Specified Cases | Specified persons only (see Note 5) | 10% |
* Always verify the latest TDS rates with a tax professional. Rates may change each Finance Act. — CA Sagar Batra
6. Form 121 vs Form 131 — Key Differences
Many taxpayers confuse Form 121 with Form 131. While both relate to TDS, they serve entirely different purposes and are used in very different circumstances.
| Criteria | Form 121 | Form 131 |
|---|---|---|
| Purpose | Prevent ALL TDS when tax liability is zero | Apply for a lower/nil rate TDS certificate |
| Who Can Use | Individuals, HUFs, certain trusts | Individuals, HUFs, firms, companies |
| Officer Approval | NOT REQUIRED — Self-declaration | REQUIRED — Income Tax Officer issues certificate |
| When to Use | Tax liability is exactly NIL | Tax is payable but standard TDS rate is too high |
| Processing Time | Immediate (submit directly to payer) | 30+ days (officer review required) |
| Validity | One financial year only | As specified in the certificate |
| Replaces | Forms 15G and 15H (legacy) | Form 13 (continues) |
| Penalty for False Declaration | Prosecution under Section 482 | Certificate can be cancelled; prosecution risk |
7. Form 121 vs Old Forms 15G & 15H — What Changed?
The transition from Forms 15G/15H to Form 121 is the biggest TDS compliance change for individual taxpayers in recent years. Here's a detailed comparison:
| Feature | Form 15G (Old) | Form 15H (Old) | Form 121 (New) |
|---|---|---|---|
| Applicable To | Individuals below 60 | Senior citizens (60+) | All eligible individuals, HUFs, trusts |
| Effective From | Legacy | Legacy | April 1, 2026 |
| Age Restriction | Below 60 only | 60 and above only | No age restriction — unified |
| UIN System | NO | NO | YES — Unique ID per form |
| Auto Data Sharing with IT Dept. | Manual / Batch | Manual / Batch | Real-time digital reporting |
| Governing Act | Income Tax Act, 1961 | Income Tax Act, 1961 | Income Tax Act, 2025 |
| Governing Section | Section 197A | Section 197A | Section 393(6) |
| Still Valid? | DISCONTINUED | DISCONTINUED | ACTIVE |
8. How to Apply — Step-by-Step Guide
Calculate Your Total Estimated Income
Add all sources — FD interest, dividends, pension, rental, salary, etc. Apply all eligible deductions under Chapter VIII of the Income Tax Act, 2025. Confirm your net tax liability is NIL.
Download Form 121
Download from the Income Tax Department's official portal or directly from your bank's internet banking section. Most nationalized and private banks now offer an integrated Form 121 submission feature.
Fill Part A of the Form
Enter your full name, PAN, address, assessment year, residential status, estimated income, income type, and whether you are 60 or above. Also mention details of any Form 121 filed earlier in the same year at other institutions.
Sign the Declaration
Read the declaration clauses carefully before signing. Physical or digital signature is accepted. Ensure all five clauses in the declaration apply to your situation truthfully.
Submit to Each Bank / Institution
File a separate form for each bank or financial institution from which you earn income. Online submission is available via internet banking portals. Physical submission at the branch is also accepted.
Collect Your UIN
After verification, the bank completes Part B and generates a Unique Identification Number (UIN). Save this UIN — it is your proof of submission and is reported to the Income Tax Department in the bank's quarterly TDS statement.
FORM NO. 121
[See Rule 211] · Declaration under Section 393(6) · Income Tax Act, 2025
For receipt of certain incomes without deduction of tax
PART A — Details of Declarant
ITR Details — Previous Two Tax Years
| Sl. | Tax Year | Acknowledgment Number | Return Income |
|---|---|---|---|
| 1 | 2024-25 | 123456789012345 | ₹ 2,75,000 |
| 2 | 2025-26 | 987654321098765 | ₹ 2,90,000 |
DECLARATION
I, Anil Kumar Sharma, having PAN AGXPS1234K, do hereby declare that:
- (i) To the best of my knowledge and belief, what is stated above is correct, complete and truly stated.
- (ii) The incomes referred to in this form are not includible in the total income of any other person under sections 96 to 99.
- (iii) Tax on my estimated total income as referred to in column 13 of Part A for tax year 2026-27 will be NIL.
- (iv) My income referred to in column 12 does not exceed the maximum amount not chargeable to tax for the said tax year.
- (v) In case this declaration is found to be false, I shall be liable to prosecution/penalty under the Act.
Place: Delhi Date: 05/04/2026
[Signature of Declarant]
10. Common Mistakes to Avoid
Based on CA Sagar Batra's years of practice, these are the most frequent errors taxpayers make with Form 121:
| Mistake | Consequence | How to Avoid |
|---|---|---|
| Submitting after TDS is deducted | TDS not reversed; must claim refund via ITR | Submit every April before first credit |
| Forgetting to file at multiple banks | TDS deducted at banks without the form | File one form per bank; maintain a tracker |
| Incorrect or mismatched PAN | Form rejected immediately by bank | Cross-check PAN with official IT portal |
| Assuming Form 121 = Tax Exemption | Tax still payable if income crosses limit; penalties apply | Recalculate if income increases mid-year |
| Not saving UIN after submission | Difficulty in grievance redressal or proof | Save UIN digitally and note it in your records |
| Failing to update residential status | Form becomes invalid if you move abroad | Intimate bank immediately if status changes |
| Using gross income instead of net taxable income | Incorrect eligibility determination | Always compute after Chapter VIII deductions |
11. Latest Updates — Budget & Tax Law 2026
The April 1, 2026 transition brought several landmark changes to India's TDS compliance framework:
- Unified Form: Form 121 replaces both Form 15G and 15H. A single form for all eligible taxpayers regardless of age eliminates confusion and redundancy.
- UIN System: Every Form 121 submission now generates a Unique Identification Number, enabling better audit trails and transparency for both taxpayers and the department.
- Real-Time Data Sharing: Banks and institutions are required to report Form 121 submissions in their quarterly TDS statements to the IT Department automatically — reducing manual errors.
- Digital Push: Online submission via both Income Tax portal and bank internet banking is now the preferred mode. Physical forms still accepted.
- New Governing Section: The form now falls under Section 393(6) of the Income Tax Act, 2025 — replacing the old Section 197A framework.
- New Rule: Rule 211 under the new Act governs the format and procedure for Form 121.
12. Practical Scenarios
👩🦳 Scenario 1: Retired Senior with Multiple FDs
Mrs. Iyer, age 67, holds three FDs across different banks with total annual interest of ₹3.5 lakh. Her deductions under 80C and other reliefs bring her total tax to NIL. She submits Form 121 separately to all three banks at the start of April 2026.
👨💼 Scenario 2: Young Professional Below Taxable Limit
Rohit, age 28, earns ₹1.5 lakh as FD interest and ₹70,000 as part-time income. After 80C deductions, his net taxable income is below the exemption threshold with NIL tax. He files Form 121 with his bank.
👩💼 Scenario 3: Person With Actual Taxable Income Files Form
Kavita has FD interest of ₹2.8 lakh and salary of ₹4 lakh. Even after deductions, her computed tax is not NIL. Filing Form 121 here is invalid — the bank will verify and still deduct TDS. Worse, false declaration can attract prosecution.
👨👩👧 Scenario 4: HUF with Interest Income
The Gupta HUF receives ₹2.1 lakh as FD interest. After the HUF's applicable deductions and income split, total tax works out to NIL. The Karta (head) files Form 121 on behalf of the HUF mentioning status as "HUF".
13. Form 121 vs Form 13 — Lower Deduction Certificate
While Form 121 is for NIL TDS requests to be approved by the payer, some taxpayers also ask about Form 13 (which continues to exist for specific cases). Here is a quick reference:
| Aspect | Form 121 | Form 13 (Lower Deduction) |
|---|---|---|
| Who issues | Taxpayer (self-declaration) | Income Tax Officer (on application) |
| Purpose | NIL TDS — full exemption | Reduced TDS rate |
| Applicable when | Tax liability = Zero | Tax liability exists but lower than standard rate |
| Time to obtain | Immediate | 30+ days |
| Used by NRIs? | No | Yes |
| Renewal required | Every FY (submit fresh) | As per certificate validity |
14. Frequently Asked Questions
What is Form 121?
Form 121 is a self-declaration form submitted by resident Indians to prevent TDS deductions on eligible income when their total estimated tax liability for the year is NIL. It is governed by Section 393(6) of the Income Tax Act, 2025 and has been effective from April 1, 2026.
Has Form 121 replaced Form 15G and 15H?
Yes. From April 1, 2026, Form 121 replaces both Form 15G (for individuals below 60) and Form 15H (for senior citizens), creating a single unified declaration form for all eligible taxpayers.
Can an NRI file Form 121?
No. Only resident Indians are eligible. NRIs are subject to higher TDS rates and should explore DTAA (Double Tax Avoidance Agreements) benefits or apply for a lower deduction certificate separately.
Is it mandatory to file Form 121?
No, it is entirely optional. However, if you do not file it and your income is subject to TDS, the deductor will deduct TDS, and you will have to reclaim it as a refund when filing your annual ITR — which causes a cash flow delay of several months.
When should I submit Form 121?
At the very beginning of the financial year — ideally the first week of April. CA Sagar Batra recommends submitting before April 10 each year to ensure no TDS is deducted on any credit during the year.
Can I submit Form 121 online?
Yes. Most banks (SBI, HDFC, ICICI, PNB, Axis etc.) allow online Form 121 submission via internet banking. The Income Tax Department's portal also supports digital submission. Digital submission is recommended as it generates a UIN instantly.
What if TDS was already deducted before I filed?
Form 121 cannot reverse a TDS already deducted. You will need to claim it as a tax credit when filing your Income Tax Return (ITR). The refund typically takes 3–6 months depending on processing time at CPC Bengaluru.
What is the penalty for giving wrong details?
Making a false statement in Form 121 is punishable under Section 482 of the Income Tax Act, 2025. This may include penalties, interest on evaded tax, and in serious cases, prosecution (criminal proceedings).
Does Form 121 need to be submitted every year?
Yes. It is valid only for the financial year for which it is filed. You must submit a fresh Form 121 at the beginning of each new financial year for every bank or institution separately.
15. Quick Checklist Before You Submit
16. Related Tax Topics You Should Know
Understanding Form 121 is just one part of smart tax planning. CA Sagar Batra recommends familiarising yourself with these closely related topics:
| Topic | Why It Matters |
|---|---|
| Section 80TTA / 80TTB | Deduction on savings account interest (₹10,000 for general, ₹50,000 for seniors) — reduces taxable income, helping you qualify for Form 121. |
| TDS on FD Interest (Section 194A) | The section under which banks deduct TDS on FD interest — directly prevented by Form 121. |
| New Tax Regime vs Old Tax Regime | Choosing the right regime affects your deductions and whether your tax is NIL — critical for Form 121 eligibility. |
| Annual Information Statement (AIS) | IT Dept cross-matches AIS data with your Form 121 declarations — always ensure they match. |
| Form 26AS | Verify TDS credits here after year end — confirms whether banks complied with your Form 121. |
| ITR-1 / ITR-2 Filing | If TDS was still deducted despite Form 121, claim it back in your ITR. |
| Presumptive Taxation (Section 44AD) | Small business owners using 44AD may still have NIL liability — check Form 121 eligibility. |
| Senior Citizen Savings Scheme (SCSS) | Interest from SCSS is TDS-eligible — file Form 121 to avoid deduction if income qualifies. |
17. Expert Tip: Tax Planning Calendar for Form 121 Users
CA Sagar Batra's Annual Checklist to ensure zero TDS hassle:
Income Estimation & Filing
Estimate total income for the year. File Form 121 with all banks and institutions before the first FD interest credit.
Monitoring Phase
Monitor AIS / 26AS to confirm TDS is not being deducted. Track any new income sources (bonus, new FD, dividend, etc.).
Mid-Year Review
If income is expected to exceed the exemption limit, intimate your bank to cancel Form 121 and deduct TDS. Pay advance tax if required.
Final Computation
Finalise tax computation. Renew insurance, invest in 80C instruments to reduce taxable income.
Cut-off
Last day to submit Form 121 (though April 1 filing for the new FY is always better practice).
📄 Download Form 121
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