Form 121 – The New TDS Declaration Form Explained
Everything you need to know about Form 121 — written in plain, simple language.
If you have a fixed deposit at a bank, earn interest from savings, or get dividend income — and your total annual income is below the taxable limit — Form 121 is the form you need to submit so that the bank does not cut TDS from your money.
What is Form 121?
Form 121 is a self-declaration form introduced under the new Income-tax Act, 2025. It allows you to tell the bank or financial institution: "My income is below the taxable limit, so please don't deduct TDS on my earnings."
This form is governed by Section 393(6) of the Income-tax Act, 2025 and is applicable from Tax Year 2026-27 (Financial Year 2026-27) onwards.
🔄 Big Change: It Replaces Form 15G and 15H
Earlier, there were two separate forms — Form 15G (for people below 60 years) and Form 15H (for senior citizens above 60 years). From April 2026 onwards, both are replaced by a single unified form — Form 121. No more confusion about which form to fill based on your age.
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What is TDS and Why Does It Matter?
TDS stands for Tax Deducted at Source. When you earn interest from a fixed deposit or receive dividends, the bank or company is required by law to deduct a certain percentage as tax before giving you the money.
For example, if your FD earns ₹20,000 interest, the bank may deduct ₹2,000 as TDS and only give you ₹18,000. You can later claim a refund when you file your Income Tax Return — but that takes time and causes unnecessary hassle.
If you know your total income is low enough that you owe zero tax, submitting Form 121 lets you receive the full amount without any deduction in the first place.
Who Can Use Form 121?
Not everyone can submit this form. Here is the eligibility in simple terms:
Eligible to File
- Resident Individuals (both below 60 years and senior citizens 60+)
- Hindu Undivided Families (HUFs)
- Sole Proprietors (filing as individuals)
- Other specified entities that meet the required conditions
🚫 Who Cannot File
- Companies (Private Limited, Public Limited, etc.)
- Partnership Firms
- Non-Residents (NRIs) — this form is only for resident taxpayers
The Most Important Condition
The Core Condition
Your estimated total tax for the year must be NIL (Zero). This means after all deductions, your calculated tax liability should come to zero. If you are expected to pay even ₹1 in tax, you are not eligible to file Form 121.
For people below 60 years, there is an additional check: the income on which you are filing the declaration should also not exceed the basic exemption limit. Senior citizens aged 60+ only need to ensure their total estimated tax is zero — thanks to rebates available under the new tax regime.
What Income Types Are Covered?
Form 121 can be submitted to avoid TDS on the following types of income:
- ✅ Interest income from bank fixed deposits and savings accounts
- ✅ Interest from post office deposits and government schemes
- ✅ Interest on securities and bonds
- ✅ Income from Mutual Fund units
- ✅ Dividend income from domestic companies (including preference shares)
- ✅ Payments from Life Insurance Policies including bonus
- ✅ Pension payments and family pension
- ✅ Provident Fund withdrawals
- ✅ Rental income (in applicable cases)
Real-Life Examples
Example 1 — Person Below 60 Years
Rahul is 35 years old. He has a fixed deposit that earns ₹40,000 interest per year. His total income including salary and interest is ₹3,80,000. Under the new tax regime with applicable rebates, his total tax works out to zero. Rahul can submit Form 121 to his bank so that TDS is not deducted on his FD interest.
Example 2 — Senior Citizen (Previously used Form 15H)
Mrs. Gupta is 68 years old. She earns family pension and interest from savings — total income ₹8,00,000. Under the new tax regime, individuals earning up to ₹12,00,000 get a 100% rebate under Section 156. So her tax is nil. She submits Form 121 to her bank instead of the old Form 15H.
Form 121 vs Old Forms 15G & 15H
What is the UIN?
One of the biggest new features of Form 121 is the Unique Identification Number (UIN). When you submit Form 121 to a bank or payer, they assign you a 26-character unique code for that declaration.
- This UIN is used to track your declaration in the tax department's system.
- The payer must report this UIN in their TDS filings — even if no TDS was deducted.
- It helps avoid errors, disputes, and duplicate declarations.
- The UIN links your Form 121 to Form 140 for proper reconciliation.
How to Submit Form 121 — Step by Step
Check your eligibility
Calculate your estimated total income for the year. If tax comes to zero, you're eligible.
Choose mode of submission
You can submit electronically (via the Income Tax e-filing portal) or in physical paper form directly to the payer.
Fill in Part A
Enter your name, PAN (mandatory), date of birth, address, contact details, type of income, estimated income amount, and estimated total income.
Declare previous Form 121s
If you've already submitted Form 121 to other payers during the same tax year, mention the total number and total income amount declared.
Sign the verification
Confirm that all details are true and your total estimated tax is nil.
Submit to the payer
Give the completed form to the bank, financial institution, or whoever is paying you the income.
Receive your UIN
The payer will allot a UIN and complete Part B of the form on their end.
PAN is Mandatory
Under the new rules, quoting your PAN (Permanent Account Number) is compulsory when submitting Form 121. If PAN is not provided or is invalid, the declaration becomes void, and TDS will be deducted at higher rates.
Also make sure your PAN is linked with Aadhaar — an inactive or unlinked PAN can cause your Form 121 to be rejected.
Important Things to Remember
- Form 121 is not mandatory — file it only if you want to avoid TDS and you qualify.
- It must be filed every tax year separately — it is not a one-time filing.
- Submit a separate form to each payer (e.g., each bank where you have an FD).
- File it at the beginning of the financial year — don't wait for income to be credited.
- Even if Form 121 is submitted, you must still report all income in your ITR.
- Making a false declaration can attract prosecution under Section 482 of the IT Act 2025.
Frequently Asked Questions
Q: Is submitting Form 121 the same as not paying tax at all?
A: No. Form 121 only prevents TDS at source. If you somehow end up with taxable income during the year, you are still required to pay tax and file your ITR. The form is based on your estimate at the start of the year.
Q: Can I submit Form 121 to multiple banks?
A: Yes. If you have FDs or accounts with multiple banks, you need to submit Form 121 to each one separately. Each submission gets its own UIN.
Q: What if I file Form 121 but my income later exceeds the limit?
A: If your income increases beyond your estimate and you end up owing tax, you must pay it through advance tax or self-assessment tax and declare it in your ITR. The form was based on an estimate — you won't be penalised for an honest change, but a false declaration is an offence.
Q: Can an NRI submit Form 121?
A: No. This form is only for resident individuals and HUFs. Non-Resident Indians (NRIs) are not eligible.
Q: How is Form 121 different from filing an ITR?
A: Form 121 is a declaration submitted to the payer (bank/institution) to avoid TDS. Filing an ITR is a separate, annual process done with the Income Tax Department to report all income and taxes. Both are different requirements — submitting Form 121 does not replace your ITR obligation.
Quick Summary — Form 121 at a Glance
Here's everything you need to remember in a few short points:
- Replaces old Form 15G and 15H from April 2026.
- Use it to stop TDS deduction on interest, dividend, pension & more.
- Only for residents whose total estimated tax for the year is nil.
- Companies and partnership firms cannot use it.
- Submit to each payer separately before income is credited.
- PAN is compulsory — an invalid or missing PAN voids the declaration.
- A UIN is assigned by the payer for tracking and transparency.
- Must be filed every year — not a one-time form.
This article is for general information only and does not constitute legal or tax advice.
Always verify details on the official Income Tax India website: incometaxindia.gov.in