Form 121: Replacing Form 15G &15H Under Income tax act 2025

Contents

Introduction: Form 121 and the End of Form 15G & 15H
Overview: Form 15G, Form 15H, and Form 121 Compared
Section 393(6) — The Legal Framework for Form 121
Incomes Covered Under Form 121 — Age-Wise Tables
Incomes NOT Covered by Form 121 — Where TDS Cannot Be Avoided
How to Fill and Submit Form 121
1. Part A — Declarant (Taxpayer) Fills
2. Part B — Payer (Bank, Company, etc.) Fills
Section 394: Lower or Nil TDS Certificate — The Remedy for Excluded Incomes
Who Is Impacted?
Timeline of Changes: From Form 15G to Form 121
Key Cut-off Dates and Deadlines
Frequently Asked Questions (FAQs) on Form 121
References & Official Sources
Conclusion

Introduction: Form 121 and the End of Form 15G & 15H

Form 121 is the unified self-declaration form introduced under the Income-tax Act, 2025 that permanently replaces both Form 15G and Form 15H with effect from 1 April 2026. For decades, resident taxpayers with nil tax liability relied on Form 15G (for individuals below 60) and Form 15H (for senior citizens) to prevent their banks, insurers, and mutual funds from deducting TDS on interest, dividends, and similar passive incomes. The new Income-tax Act, 2025 consolidates both into a single declaration — Form 121 — governed by Section 393(6) read with Rule 211 of the Income-tax Rules, 2026.

One unified declaration, one set of rules — Form 121 removes the age-based distinction that existed between Form 15G and Form 15H, but introduces a sharper income ceiling test for individuals below 60.

This guide is written for Tax Year 2026-27 onward. It covers who can use Form 121, which incomes qualify, the two age-group eligibility tables you need before filing, the full list of incomes that Form 121 cannot protect, and what taxpayers with professional or technical service income must do instead under Section 394. Whether you are a bank depositor, a retired pensioner, an HUF receiving dividends, or a tax practitioner advising clients, this post gives you the complete picture in one place.

💡 Quick Tip

If you already have Form 15G or Form 15H declarations in transit for FY 2025-26 (AY 2026-27) under the old Act, those remain valid for that year. Form 121 becomes mandatory only for Tax Year 2026-27 onward, i.e., income credited or paid from 1 April 2026. Submit fresh Form 121 to every payer at the start of each new tax year.

Overview: Form 15G, Form 15H, and Form 121 Compared

For the financial year ending 31 March 2026, taxpayers filed either Form 15G or Form 15H depending on age. Under the new Income-tax Act, 2025 — operative from Tax Year 2026-27 — this age-split disappears and a single Form 121 covers all eligible residents. The table below shows the key differences at a glance so that existing filers can quickly understand what has changed.

Note: Form 15G and Form 15H ceased to be valid for Tax Year 2026-27 onward. Any payer (bank, post office, insurer) who accepts old Form 15G or 15H declarations for income credited after 31 March 2026 will be in non-compliance with the new Act.

Important: The transition does not mean automatic protection. Every taxpayer who previously filed Form 15G or Form 15H must proactively submit Form 121 afresh to each payer for Tax Year 2026-27 — silence or continuation of old forms does not carry forward.

Parameter	Form 15G (Old Act)	Form 15H (Old Act)	Form 121 (New Act — from 1 Apr 2026)
Governing Provision	Section 197A(1), ITA 1961	Section 197A(1C), ITA 1961	Section 393(6), ITA 2025 + Rule 211, ITR 2026
Eligible Taxpayer	Resident individuals below 60 years; HUFs	Resident individuals aged 60 years or above	All resident individuals (any age) + HUFs + other eligible persons (not company or firm)
Nil Tax Condition	Yes — tax on total income must be nil	Yes — tax on total income must be nil	Yes — estimated total income must result in nil tax liability
Income Ceiling on Covered Amount	Aggregate covered income must not exceed basic exemption limit (applies to below-60 and HUFs)	No income ceiling — only nil tax condition applies	Below 60: ceiling applies (aggregate covered income ≤ basic exemption limit). Age 60+: No income ceiling (only nil tax condition)
Dividend Income	Covered (for individuals)	Covered	Covered — but only for resident individuals, NOT for HUFs
Unique Identification Number (UIN)	Not applicable	Not applicable	Mandatory — 26-character UIN issued by payer, reported in quarterly TDS returns (Form 140)
Payer Reporting	Quarterly TDS return	Quarterly TDS return	Payer uploads declarations to e-filing portal by 7th of following month; quarterly TDS return (Form 140) with UIN
Submission Frequency	Once per financial year per payer	Once per financial year per payer	Once per tax year per payer — not transferable between payers

The most important structural change is the consolidation into one form. Under the old law, a 70-year-old senior citizen and a 35-year-old salaried employee earning interest from the same bank had to file different forms. Under the new Act, both file Form 121 — but the income ceiling restriction that applied to below-60 filers under Form 15G continues in an equivalent form under the new Section 393(6) Note.

Section 393(6) — The Legal Framework for Form 121

Section 393 of the Income-tax Act, 2025 is the comprehensive TDS provision replacing the scattered TDS sections of the old 1961 Act. Sub-section (6) specifically provides the mechanism by which a taxpayer can prevent TDS on specified incomes by filing a written declaration — Form 121. Understanding this sub-section is essential to correctly advising clients on whether they qualify and for which incomes.

Who Is Eligible to File Form 121?

Section 393(6) contains a Table with two rows defining the class of eligible persons. The eligibility is not universal — companies and firms are explicitly excluded regardless of their income level or tax liability.

Sl. No. in Section 393(6) Table	Eligible Person	Incomes Covered (Reference)
1	An individual being a resident	(a) PF accumulated balance [Section 392(7)]; (b) Insurance commission [Sl. 1(i)]; (c) Rent [Sl. 2(ii)]; (d) MF/unit income [Sl. 4(i)]; (e) Interest on securities and other interest [Sl. 5(i), (ii), (iii)]; (f) Life insurance policy payment [Sl. 8(i)]; (g) Dividend [Sl. 7]
2	Any person NOT being a company, a firm, or an individual covered in Sl. No. 1 (i.e., HUFs and specified entities)	(a) to (f) only — Dividend at item (g) is NOT available to HUFs and other entities
—	Companies (Indian or foreign)	Cannot file Form 121 for any income — not eligible
—	Firms (Partnership firms and LLPs)	Cannot file Form 121 for any income — not eligible
—	Non-residents (NRIs)	Cannot file Form 121 — Form 121 is for residents only

Key Alert for HUFs: HUFs filing Form 121 cannot use it to prevent TDS on dividend income from domestic companies. This is a departure from the old law where Form 15G covered dividends for HUFs in practice. Under Section 393(6), Sl. No. 2 explicitly covers only items (a) to (f) — dividend at item (g) is reserved for resident individuals only.

Conditions That Must Be Satisfied

Section 393(6) is not a blanket exemption — it applies only when all of the following statutory conditions are simultaneously met. A declaration that is filed while any condition is unmet is legally invalid, and the payer who accepts it remains liable for the TDS not deducted.

Form 121: Replacing Form 15G &15H Under Income tax act 2025

Nil Tax Condition (Mandatory for All): The tax on the declarant's estimated total income for the tax year — computed on the entire income including the income covered by Form 121 — must be nil. This nil tax can arise through the basic exemption limit, deductions under Chapter VIII, or the rebate under Section 156 of the new Act (equivalent of old Section 87A). All three routes are permissible for senior citizens aged 60 and above. For individuals below 60, a separate ceiling applies as described below.
Residential Status (Mandatory for All): The declarant must be a resident of India in the relevant tax year. A person who becomes non-resident during the tax year cannot file Form 121 and must arrange for TDS to be deducted or obtain a certificate under Section 394.
PAN Mandatory (Mandatory for All): A valid Permanent Account Number must be quoted in Form 121. The payer is directed not to act on any declaration received without PAN. Where PAN is absent or invalid, TDS applies at a higher rate (typically 20% or the applicable rate, whichever is higher) under Section 397.
Non-Clubbing Condition: The income declared in Form 121 should not be includible in the total income of any other person under the clubbing provisions (Sections 96 to 99 of the ITA 2025). For example, if a minor child's FD interest is clubbed in the parent's return, the parent cannot file Form 121 for that interest in the child's name.
Income Ceiling Condition (Only for Individuals Below 60 and HUFs): The aggregate of all amounts of covered income to be credited or paid during the tax year must not exceed the maximum amount not chargeable to tax — i.e., the basic exemption limit. This condition does NOT apply to senior citizens aged 60 or above. This is the most frequently misunderstood aspect of Form 121 and is explained in detail in the next sub-section.
Prior ITR Filing (Best Practice / Payer Verification): Part A of Form 121 captures ITR acknowledgement numbers for the last two tax years. While not a strict statutory disqualification, payers are guided to verify prior filing compliance, and CBDT guidance expects declarants who are required to file returns to have filed them for the preceding two tax years.

The Critical Difference: Below 60 vs. Senior Citizens

This is the single most important practical distinction in Form 121 and the area most likely to lead to errors. The Note appended to Section 393(6) reads: "The provisions of this sub-section shall not apply in case of a person referred to in column B of the Table, other than an individual being a resident who is of the age of sixty years or more at any time during the tax year, if the aggregate of amounts of any income or sum of the nature referred to in the provision mentioned in column C of this Table, is credited or paid or likely to be credited or paid during the relevant tax year, exceeds the maximum amount not chargeable to tax."

In plain language, this means that for individuals below 60 years and for HUFs, the aggregate of all income for which Form 121 is being used (across all payers combined) must not exceed the basic exemption limit for that tax year. For Tax Year 2026-27, the applicable basic exemption limit under the new tax regime is ₹4,00,000 [Verify on Official Source — incometaxindia.gov.in]. This condition does not apply to senior citizens (aged 60 or above at any point during the tax year).

Critical Warning — The Rebate Trap for Below-60 Filers: A taxpayer below 60 years with total interest income of ₹9,00,000 may have nil actual tax liability due to the rebate under Section 156 (which exempts income up to ₹12,00,000 from effective tax under the new regime). However, this person CANNOT validly file Form 121 because the aggregate covered income (₹9,00,000) exceeds the basic exemption limit (₹4,00,000). The rebate reduces final tax liability at the return stage — it does not affect the income ceiling test under Section 393(6). Such a taxpayer must allow TDS to be deducted and claim a refund while filing their ITR, or apply for a lower/nil TDS certificate under Section 394.

Incomes Covered Under Form 121 — Age-Wise Tables

The following two tables present the complete list of incomes for which Form 121 can be used to prevent TDS deduction, along with the applicable TDS threshold limits and rates from the payer's perspective. Separate tables are provided for individuals below 60 years and for senior citizens (aged 60 or above), because the eligibility conditions and some threshold limits differ between the two groups.

Table 1: Individuals Below 60 Years of Age (Including HUFs)

For this category, both conditions must be satisfied: (a) estimated total income must result in nil tax liability, and (b) the aggregate of all covered income across all payers must not exceed the basic exemption limit for the tax year. Form 121 declaration covers the following income types when received by a resident individual below 60 or an HUF.

Income Type	Section 393(1) Reference	Typical Payer	TDS Rate (if not prevented)	TDS Threshold	Form 121 Available?
PF Accumulated Balance Withdrawal	Section 392(7)	EPF Trust / Recognised PF	Rates in force	As applicable	Yes — Sl. No. 1(a)
Insurance Commission (for procuring / renewing / reviving policies)	Section 393(1) Table Sl. 1(i)	Insurance companies	Rates in force	₹20,000	Yes — Sl. No. 1(b)
Rent (any land, building, furniture, fittings, machinery from a specified person)	Section 393(1) Table Sl. 2(ii)	Specified person / company paying rent	2% (machinery/plant); 10% (land/building/furniture)	₹50,000 per month	Yes — Sl. No. 1(c)
Income from Mutual Fund Units / Administrator units / Specified company units	Section 393(1) Table Sl. 4(i)	Mutual Fund / AMC / specified company	10%	₹10,000	Yes — Sl. No. 1(d)
Interest on Securities (debentures, bonds, etc.)	Section 393(1) Table Sl. 5(i)	Any person	Rates in force	₹10,000	Yes — Sl. No. 1(e)
Interest other than on securities — from Banking Company or Co-operative Bank or Post Office	Section 393(1) Table Sl. 5(ii)	Bank / co-operative bank / post office	Rates in force	₹50,000 per year (for individuals below 60)	Yes — Sl. No. 1(e)
Interest other than on securities — from any other specified person (NBFCs, companies, etc.)	Section 393(1) Table Sl. 5(iii)	Specified persons other than banks	Rates in force	₹10,000	Yes — Sl. No. 1(e)
Payment under Life Insurance Policy (including bonus)	Section 393(1) Table Sl. 8(i)	Insurance companies	2% of income component	₹1,00,000	Yes — Sl. No. 1(f)
Dividend (including preference dividend) from domestic companies	Section 393(1) Table Sl. 7	Domestic companies	10%	Nil (TDS on entire amount)	Yes for Resident Individuals — Sl. No. 1(g). NOT available for HUFs

Aggregate Income Cap for Below-60 Filers: The sum total of all the above incomes across ALL payers combined must not exceed the basic exemption limit (₹4,00,000 for Tax Year 2026-27 under the new regime — verify on incometaxindia.gov.in). If the aggregate exceeds this figure, Form 121 is invalid even if estimated total tax is nil due to rebate under Section 156.

Table 2: Senior Citizens — Aged 60 Years or Above at Any Time During the Tax Year

Senior citizens (resident individuals aged 60 or above at any point during the tax year) enjoy a significant advantage under Form 121 — the aggregate income ceiling that restricts below-60 filers does not apply to them. A senior citizen whose only income is bank interest of ₹10,00,000 can validly file Form 121 if their total estimated tax liability is nil (e.g., due to deductions under Chapter VIII or the rebate under Section 156 of the new Act). The table below confirms the covered incomes for senior citizens.

Income Type	Section 393(1) Reference	Typical Payer	TDS Rate (if not prevented)	TDS Threshold for Senior Citizens	Form 121 Available?
PF Accumulated Balance Withdrawal	Section 392(7)	EPF Trust / Recognised PF	Rates in force	As applicable	Yes
Insurance Commission	Section 393(1) Table Sl. 1(i)	Insurance companies	Rates in force	₹20,000	Yes
Rent (from specified person)	Section 393(1) Table Sl. 2(ii)	Specified persons paying rent	2% / 10%	₹50,000 per month	Yes
Income from Mutual Fund Units	Section 393(1) Table Sl. 4(i)	Mutual Fund / AMC	10%	₹10,000	Yes
Interest on Securities	Section 393(1) Table Sl. 5(i)	Any person	Rates in force	₹10,000	Yes
Interest from Banking Company / Co-operative Bank / Post Office	Section 393(1) Table Sl. 5(ii)	Bank / co-operative bank / post office	Rates in force	₹1,00,000 per year (higher threshold for senior citizens)	Yes — No aggregate income ceiling applies to 60+ filers
Interest from Other Specified Persons (NBFCs, etc.)	Section 393(1) Table Sl. 5(iii)	Specified persons other than banks	Rates in force	₹10,000	Yes
Life Insurance Policy Payment (including bonus)	Section 393(1) Table Sl. 8(i)	Insurance companies	2% of income component	₹1,00,000	Yes
Dividend from Domestic Companies	Section 393(1) Table Sl. 7	Domestic companies	10%	Nil	Yes — available for resident individual senior citizens

Key Advantage for Senior Citizens: A senior citizen with ₹8,00,000 in FD interest and nil tax (due to deductions or rebate under the new Act) can file Form 121 even though the aggregate interest far exceeds the basic exemption limit. The same amount of interest would disqualify a below-60 taxpayer from using Form 121.

Special Note for HUFs and Other Eligible Entities

HUFs and other specified entities (not companies or firms) fall under Sl. No. 2 of the Section 393(6) Table. They can file Form 121 for incomes at items (a) to (f) — PF, insurance commission, rent, MF units, interest (all three categories), and life insurance payments. However, dividends at item (g) are expressly excluded from the list available to Sl. No. 2 filers. This means HUFs receiving dividends from domestic companies will face TDS at 10% with no Form 121 remedy. Additionally, HUFs are subject to the aggregate income ceiling condition (same as below-60 individuals) and must ensure the aggregate covered income does not exceed the basic exemption limit applicable to HUFs for the tax year.

Incomes NOT Covered by Form 121 — Where TDS Cannot Be Avoided Through Declaration

One of the most important aspects of Form 121 that taxpayers and practitioners must understand is that it is not a universal TDS prevention tool. Section 393(6) covers only the specific incomes listed in its Table — all other TDS provisions in Section 393 operate independently and cannot be overridden by filing Form 121. The following incomes are outside the scope of Section 393(6), meaning TDS will be deducted regardless of whether the recipient's total tax liability is nil.

Income / Payment Type	Section 393 Reference	TDS Rate	Threshold	Can Form 121 Prevent TDS?	Alternative Remedy
Fees for Professional Services (doctors, lawyers, architects, consultants, etc.)	Section 393(1) Table Sl. 6(iii)(a)	10% (general); 2% (technical services)	₹50,000	No	Apply for Nil/Lower TDS Certificate under Section 394
Fees for Technical Services	Section 393(1) Table Sl. 6(iii)(b)	2%	₹50,000	No	Section 394 Certificate
Director Remuneration / Fees / Commission (not under Section 392)	Section 393(1) Table Sl. 6(iii)(c)	10%	Nil	No	Section 394 Certificate
Royalty	Section 393(1) Table Sl. 6(iii)(d)	2% (cinematographic); 10% (others)	₹50,000	No	Section 394 Certificate
Amount under Section 26(2)(h)	Section 393(1) Table Sl. 6(iii)(e)	10%	₹50,000	No	Section 394 Certificate
Contract Payments (to contractors by designated persons)	Section 393(1) Table Sl. 6(i)	1% (individual/HUF contractor); 2% (others)	₹30,000 single / ₹1,00,000 aggregate	No	Section 394 Certificate or statutory exemption for small carriers
Non-Insurance Commission / Brokerage (from specified person)	Section 393(1) Table Sl. 1(ii)	2%	₹20,000	No	Section 394 Certificate
Salary and Wages	Section 392 (separate provision)	Rates in force (slab-based)	Basic exemption limit	No	Submit investment proofs/deduction evidence to employer; Section 394 for excess cases
Consideration for Transfer of Immovable Property	Section 393(1) Table Sl. 3(i)	1% of consideration or stamp duty value (higher)	₹50,00,000	No	No general exemption; capital gains exemptions apply at return stage
Lottery / Crossword / Card Game Winnings	Section 393(3) Table Sl. 1	Rates in force (typically 30%)	₹10,000 per transaction	No	No remedy — TDS is mandatory; claim refund via ITR
Online Game Winnings	Section 393(3) Table Sl. 2	Rates in force	On net winnings in user account	No	No remedy — TDS is mandatory; claim refund via ITR
Transfer / Sale of Virtual Digital Assets (Crypto, NFTs)	Section 393(1) Table Sl. 8(vi)	1%	Nil	No	No remedy — TDS is mandatory; claim refund via ITR
Business Trust Distribution (other than covered income)	Section 393(1) Table Sl. 4(ii), 4(iii), 4(iv)	10%	Nil	No	Section 394 Certificate in specific cases
Benefits / Perquisites from Business or Profession	Section 393(1) Table Sl. 8(iv)	10% of value	₹20,000	No	No Form 121 remedy; ensure valuation is correct
Purchase of Goods (above threshold)	Section 393(1) Table Sl. 8(ii)	0.1%	₹50,00,000	No	No remedy — TDS is mandatory; claim credit via ITR
E-Commerce Payments to Participants	Section 393(1) Table Sl. 8(v)	0.1%	Nil	No	Statutory exemption for small e-commerce sellers (₹5 lakh threshold); otherwise claim credit via ITR
Partner Salary / Remuneration / Interest from Firm	Section 393(3) Table Sl. 7	10%	₹20,000	No	Section 394 Certificate; firm can adjust deduction for declared income profile
Dividend — available to HUFs (specifically excluded)	Section 393(1) Table Sl. 7	10%	Nil	Not for HUFs (only resident individuals can use Form 121 for dividends)	Section 394 Certificate for HUFs

The absence of professional fees from the Form 121 scheme reflects a deliberate policy choice. Professional income is business income where the deductor (specified person) is always required to deduct unless a Section 394 certificate is in hand. The rebate-based nil tax position of the recipient is irrelevant at the point of deduction — TDS follows the payment, not the recipient's end-year tax computation.

Common Mistake: A practitioner below 60 years with total professional receipts of ₹8,00,000 and no other income may assume that since their total tax is nil (due to the rebate under Section 156), they can file Form 121 to prevent TDS. This is incorrect on two counts: (a) professional income is not in the Section 393(6) Table at all, and (b) even if it were, the aggregate income ceiling condition would be breached. The correct approach is to apply for a nil TDS certificate under Section 394 from the Assessing Officer.

How to Fill and Submit Form 121

Form 121 is divided into two parts: Part A (completed by the declarant — the taxpayer) and Part B (completed by the payer — the bank, company, insurer, etc.). The declarant has no control over Part B but must ensure Part A is accurately filled before submission to each payer. Errors in Part A — especially in income estimates or PAN — can invalidate the declaration.

Part A — Declarant (Taxpayer) Fills

Compute Your Eligibility First: Before touching the form, compute your estimated total income for the tax year including all sources — salary, business, capital gains, interest, dividends, rent, and the income for which you are filing Form 121. Apply all deductions under Chapter VIII and compute tax. If tax is nil, proceed. For individuals below 60, also compute the aggregate of only the Form 121-covered incomes across all payers — this aggregate must not exceed the basic exemption limit.
Personal Details (Items 1–8): Enter your name, full address, PAN (mandatory), residential status (must be Resident), status (Individual / HUF / other), age (and whether you are 60 or above at any time during the tax year), email ID, and mobile number. The tax year for which the declaration is made must be entered correctly — do not carry forward last year's form.
Income Details (Items 9–13): State the nature of income (interest, dividend, insurance commission, PF withdrawal, etc.), the name and address of the payer to whom this specific Form 121 is submitted, and the estimated amount of income from that payer. Also disclose the number and total amount of all other Form 121 declarations filed with other payers during the same tax year — this is the aggregate disclosure that helps confirm the income ceiling condition is met for below-60 filers. Finally, state the estimated total income for the tax year.
Prior ITR Details (Item 14): Provide the ITR acknowledgement number and returned income for the last two tax years in which you were required to file a return. If you were not required to file (income below threshold), state "Not Required." Do not leave this blank.
Sign the Declaration: Read the declaration clause carefully. By signing, you confirm nil tax liability, non-clubbing of income, and accuracy of all details. False declaration attracts penalty under Section 271C and prosecution under Section 277 of the Income-tax Act, 2025.
Submit to Each Payer Separately: Form 121 is not a central declaration. A separate form must be submitted to each payer — your bank, your mutual fund, your insurance company, etc. — before the income is first credited or paid. Submission can be in paper or electronic form depending on the payer's system.

Part B — Payer (Bank, Company, etc.) Fills

Part B is entirely the payer's responsibility but the taxpayer should understand it to verify compliance. The payer must enter their Tax Deduction Account Number (TAN), verify the PAN quoted in Part A, and confirm the details of the declaration. Most critically, the payer must generate a 26-character Unique Identification Number (UIN) for each Form 121 received. The UIN format follows the CBDT's system notification and must be quoted in the quarterly TDS return (Form 140). Payers are also required to upload all received Form 121 declarations to the income tax e-filing portal by the 7th of the month following the month of receipt, as directed under Section 393(7) and Rule 211.

Tip for Taxpayers: Ask your bank or AMC to confirm the UIN allotted to your Form 121 declaration. This UIN can be cross-verified in your AIS (Annual Information Statement) on the income tax portal to confirm that the payer has correctly reported your nil-deduction status. If TDS is still being deducted despite a valid Form 121 submission, escalate to the payer's compliance team with the UIN reference.

Section 394: Lower or Nil TDS Certificate — The Remedy for Excluded Incomes

For taxpayers whose income falls outside the Form 121 scheme — most importantly, those earning professional fees, royalty, director remuneration, contract payments, or any other excluded category — the correct statutory remedy is to apply for a lower or nil TDS certificate from the jurisdictional Assessing Officer under Section 394 of the Income-tax Act, 2025. Section 394 is the equivalent of the old Section 197 of the Income-tax Act, 1961 and operates as a prospective certificate issued by the tax department to the payer, directing them to deduct TDS at a lower or nil rate.

Who Should Apply: Any taxpayer whose estimated total income for the tax year will result in nil or lower-than-standard tax liability, but who receives income on which Form 121 is not applicable (professional fees, technical service fees, royalties, contractor receipts, salary in exceptional cases, etc.).
When to Apply: Applications under Section 394 must be filed before the income is paid or credited in the tax year. Applying after TDS has already been deducted is futile for that payment — TDS already deducted can only be recovered through a refund claim in the ITR. Apply at the beginning of the tax year, ideally in April.
How to Apply: File the application through the income tax e-filing portal under the TDS section. The application should include estimated total income, details of income from each payer, deductions claimed, tax computation, and supporting documents such as the previous year's ITR, balance sheet (for professionals), and fee agreements.
What the AO Issues: The Assessing Officer, after reviewing the application, issues a certificate specifying the nil or lower TDS rate. This certificate is valid for the tax year mentioned and must be submitted to each payer (each company, client, or entity paying professional fees). The payer deducts TDS at the rate specified in the certificate rather than the standard rate.
Validity and Renewal: Section 394 certificates are issued for a specific tax year and must be renewed annually. A fresh application must be filed each year. Payers who have received such a certificate and deduct TDS at the lower rate are absolved of liability for the balance TDS amount.

Practical Example: A freelance chartered accountant below 60 years has professional fee receipts of ₹7,00,000 and total income of ₹7,00,000 with nil tax liability under Section 156 (rebate up to ₹12 lakh). TDS would ordinarily be deducted at 10% (₹70,000) by each client above ₹50,000. Since Form 121 does not apply to professional fees, the CA should apply under Section 394 for a nil TDS certificate. Once the certificate is issued, the CA submits a copy to each client company, which then deducts TDS at nil. Without the certificate, TDS of ₹70,000 would be deducted and refunded after ITR filing — a cash flow disadvantage of several months.

Who Is Impacted?

The transition from Form 15G / Form 15H to Form 121 affects every resident taxpayer who was previously using these declarations, as well as every payer (bank, insurer, AMC, company) who accepted them. The impact varies by category.

Bank Fixed Deposit Holders (Below 60): Must re-evaluate eligibility under the new aggregate income ceiling rule. Those with interest income exceeding the basic exemption limit across all FDs — even if total tax is nil due to rebate — can no longer file Form 121 and must accept TDS deduction and claim refunds.
Senior Citizens (60 and Above): Largely benefited — the transition is smooth, the new Form 121 has no aggregate income ceiling for seniors, and the interest threshold from banks is ₹1,00,000 (higher than for below-60). Only the form number changes for them.
HUFs: Must note that Form 121 cannot be used for dividend income (item (g) is not available to Sl. No. 2 filers). HUFs receiving dividends must either accept 10% TDS and claim credit in their ITR, or apply for a nil TDS certificate under Section 394.
Freelancers and Self-Employed Professionals: The most affected group in terms of new planning required. Professional income remains outside Form 121 scope. Those with nil actual tax liability must apply under Section 394 to avoid cash flow disruption from unnecessary TDS deductions.
Insurance Agents (Commission Income): The insurance commission category continues to be covered by Form 121 (both old Form 15G / 15H and new Form 121 covered it). Agents with nil tax liability can continue to prevent TDS on commission income through Form 121 — subject to the aggregate income ceiling for below-60 agents.
Banks, NBFCs, Post Offices, and Mutual Funds (Payers): Must update their systems to accept Form 121 (not Form 15G / 15H), generate UINs per declaration, upload records monthly by the 7th of the following month, and report UINs in quarterly TDS returns (Form 140).

Not Impacted: Taxpayers with positive tax liability are not directly impacted by the Form 121 regime — they were never eligible for Form 15G or 15H and similarly cannot use Form 121. Their TDS continues to operate as usual, with credit adjustable in the ITR.

Timeline of Changes: From Form 15G to Form 121

The evolution of TDS nil-declaration forms in India spans several decades, reflecting the gradual expansion of the TDS net and the need to protect genuine nil-tax earners from unnecessary deductions and refund delays.

1967 — Introduction of TDS on Interest: TDS provisions for interest income were introduced in the Income-tax Act, 1961, necessitating a mechanism for taxpayers with nil tax liability to declare their status to payers.
1978 — Form 15G Introduced: Form 15G was introduced under Rule 29C of the Income-tax Rules, 1962, allowing resident individuals (below 60) and HUFs to declare nil tax liability on interest income and prevent TDS deduction. The condition required that both the specific interest income and the total income should not exceed the basic exemption limit.
1997 — Finance Act Extends Scope: The scope of Form 15G was progressively extended to cover insurance commission, rent, MF units, and other specified incomes as TDS was expanded to new income categories.
2012 — Form 15H Introduced for Senior Citizens: The Finance Act 2012 inserted Section 197A(1C) into the Income-tax Act, 1961, introducing Form 15H specifically for resident individuals aged 60 or above. Unlike Form 15G, Form 15H had no aggregate income ceiling — only the nil tax condition applied. This recognised that senior citizens typically have higher passive income from savings but no active employment income.
2019 — Digital Submission and CBDT Streamlining: CBDT mandated electronic submission of Form 15G / 15H for large payers (banks with 10+ branches) and introduced centralized online processing of declarations via the TDS Reconciliation Analysis and Correction Enabling System (TRACES).
2023–2025 — New Income-tax Code Drafted: The government undertook a comprehensive recodification of the Income-tax Act, 1961, resulting in the Income-tax Act, 2025. Section 393(6) of the new Act replaced Sections 197A(1), 197A(1A), and 197A(1C) with a unified declaration mechanism.
1 April 2026 — Form 121 Becomes Operative: With the Income-tax Act, 2025 and Income-tax Rules, 2026 coming into force for Tax Year 2026-27, Form 121 replaces Forms 15G and 15H entirely. The CBDT issued a system notification (reported as Notification No. 1/CPC(TDS)/2026 dated 28/30 March 2026 — verify on official source) prescribing the 26-character UIN format and the monthly upload obligation for payers.

Key Cut-off Dates and Deadlines

Missing a key deadline in the Form 121 ecosystem results in TDS being deducted at source, requiring the taxpayer to wait months for a refund through the ITR filing route. Payers who fail to comply with reporting deadlines face interest and penalty under the Act. The following table captures all critical dates for Tax Year 2026-27.

Date / Deadline	Event / Action Required	Applicable To	Consequence of Missing
1 April 2026 (onwards)	Form 121 becomes the only valid nil-TDS declaration; Form 15G and 15H cease to apply	All taxpayers and payers	Old Forms 15G / 15H are legally invalid for Tax Year 2026-27; TDS must be deducted if Form 121 is not on record
Before first income credit of Tax Year 2026-27	Submit Form 121 (Part A) to each payer — bank, AMC, insurer, company	Taxpayers (individuals / HUFs) with nil estimated tax liability and covered income	TDS will be deducted on any income credited before Form 121 is received; no retroactive effect for TDS already deducted
7th of each month following declaration receipt	Payer must upload Form 121 declarations to e-filing portal as required under Section 393(7) and Rule 211	All payers (banks, NBFCs, AMCs, insurers, companies)	Non-compliance with monthly upload obligation — penalty under applicable TDS default provisions
15 July 2026 (Q1 TDS Return)	Payer files quarterly TDS return (Form 140) for April–June 2026 period; UINs of all Form 121 declarations must be quoted	All payers / deductors	Late or incorrect TDS return — interest under Section 400 and penalty under applicable provisions of the new Act
31 July 2026 (expected)	Due date for filing ITR for Tax Year 2025-26 (AY 2026-27) under old Act — not directly Form 121 related, but prior year ITR is referenced in Form 121 Part A Item 14	All individual taxpayers (non-audit cases)	Late filing fee under Section [Verify on Official Source]; interest on tax due
31 March 2027	Last date for Form 121 declaration to remain valid for Tax Year 2026-27; fresh Form 121 must be filed for Tax Year 2027-28 from 1 April 2027	All Form 121 filers	Declarations do not carry over; failure to renew means TDS will resume from the new tax year

Warning: TDS deducted before Form 121 is submitted to a payer cannot be reversed by the payer. The only remedy is to claim a refund by filing your ITR and reporting the TDS credit in your return. Submit Form 121 to every payer at the very beginning of the tax year — before April interest is credited — to ensure complete coverage for the full year.

Frequently Asked Questions (FAQs) on Form 121, Form 15G, and Form 15H

What is Form 121 and which law introduces it?

Form 121 is a unified self-declaration form under Section 393(6) of the Income-tax Act, 2025 read with Rule 211 of the Income-tax Rules, 2026. It allows eligible resident taxpayers to declare that their estimated total income for the tax year will result in nil tax liability, thereby directing the payer (bank, AMC, insurer, etc.) not to deduct TDS on specified income categories. It replaces both Form 15G (old Section 197A(1) and 197A(1A)) and Form 15H (old Section 197A(1C)) effective 1 April 2026 — the start of Tax Year 2026-27.

Can I still use Form 15G or Form 15H for Tax Year 2026-27?

No. Form 15G and Form 15H are valid only under the Income-tax Act, 1961 and the Income-tax Rules, 1962. With the Income-tax Act, 2025 replacing the 1961 Act for Tax Year 2026-27 onward, old Forms 15G and 15H have no legal standing for income credited or paid from 1 April 2026. Any payer that continues to accept Form 15G or Form 15H instead of Form 121 for Tax Year 2026-27 will not be protected from TDS default liability. All taxpayers and payers must transition to Form 121.

I am below 60 years and my total income is ₹8 lakh — but my tax is nil due to the Section 156 rebate. Can I file Form 121?

No, you most likely cannot, and this is the most critical trap in the new Form 121 framework. Section 393(6) Note imposes two separate conditions for individuals below 60: (a) nil estimated tax liability, and (b) the aggregate of all income for which Form 121 is filed must not exceed the basic exemption limit (approximately ₹4,00,000 for Tax Year 2026-27 under the new regime — verify on incometaxindia.gov.in). Even though your total tax is nil due to the rebate under Section 156, if your covered income (say, ₹8,00,000 from FDs) exceeds the basic exemption limit, Form 121 is invalid. TDS will be deducted, and you must claim a refund via your ITR. The rebate reduces final tax at the return stage; it does not satisfy the income ceiling condition under Section 393(6).

I am 62 years old with FD interest of ₹10 lakh and no other income. My tax is nil. Can I file Form 121?

Yes. Senior citizens aged 60 or above are exempt from the aggregate income ceiling condition under the Note to Section 393(6). Only the nil tax condition applies to you. If your estimated total tax for Tax Year 2026-27 is nil (after accounting for deductions or the rebate under Section 156), you can validly file Form 121 for your bank interest — regardless of how large that interest amount is. Submit Form 121 to your bank before the first interest credit of the year to prevent TDS deduction throughout the year.

Can Form 121 prevent TDS on my professional fees or freelance income?

No. Fees for professional services, fees for technical services, director remuneration, and royalties are governed by Section 393(1) Table Sl. No. 6(iii). This provision is completely absent from the Section 393(6) Table — the list of incomes for which Form 121 is available. Form 121 has no effect whatsoever on TDS deductible from professional or technical service fees. The correct remedy for a professional with nil tax liability is to apply for a nil or lower TDS certificate from the Assessing Officer under Section 394 of the Income-tax Act, 2025 (equivalent of the old Section 197 certificate under the 1961 Act).

Our HUF receives dividends from several listed companies. Can we file Form 121 for dividend TDS?

No. This is a significant restriction introduced (or clarified) in the new Act. Dividend at Sl. No. 1(g) of the Section 393(6) Table is available only to resident individuals (Sl. No. 1 of the Table). HUFs fall under Sl. No. 2 of the Table, which covers items (a) to (f) only — dividend is excluded. HUFs receiving dividends will face TDS at 10% with no Form 121 remedy. The HUF may apply for a nil TDS certificate under Section 394 if their estimated total tax is nil, or accept the TDS and claim credit in the HUF's ITR.

Do I need to submit Form 121 to every bank and every AMC separately?

Yes, absolutely. Form 121 is a payer-specific, tax-year-specific declaration. It does not operate as a central or universal declaration with the tax department. You must submit a separate Form 121 to each and every payer from whom you wish to receive income without TDS — your savings bank, each FD branch, your mutual fund AMC, your insurance company, and any other payer. If you have FDs in three different banks, you must submit three separate Form 121 declarations. The payer issues a different UIN for each declaration received.

What is the UIN in Form 121 and what should taxpayers do with it?

The Unique Identification Number (UIN) is a 26-character alphanumeric code generated by the payer (bank, AMC, etc.) for each Form 121 declaration received. It is assigned per declaration and is quoted by the payer in their quarterly TDS returns (Form 140) to map the nil-deduction against the correct taxpayer. As a taxpayer, you should request your UIN from the payer and verify it against your Annual Information Statement (AIS) on the income tax e-filing portal. A correctly reported UIN confirms that the payer has processed your declaration and that the nil-deduction will reflect in your tax credit records.

What happens if I file Form 121 but my actual income exceeds what I estimated?

If your actual total income at the end of the tax year turns out to be higher than estimated — resulting in a positive tax liability — you are responsible for paying advance tax and self-assessment tax and filing your ITR correctly. The Act does not provide for automatic penalties merely because an estimate proved inaccurate due to genuine variance. However, if the declaration was made knowing the income would exceed limits or that tax would not be nil, it constitutes a false declaration attracting penalty under Section 271C and possible prosecution under Section 277 of the Income-tax Act, 2025. Taxpayers should make conservative and honest estimates.

Is my rent income covered by Form 121? My tenant is an individual.

It depends on who the payer (tenant) is. Section 393(6) covers rent under Sl. No. 1(c), which refers to rent falling under Section 393(1) Table Sl. No. 2(ii) — rent paid by a "specified person." Under the new Act, "specified person" typically refers to entities required to deduct TDS — companies, firms, and individuals/HUFs who are liable to tax audit. An ordinary individual tenant who is not a specified person does not deduct TDS on rent in the first place, so Form 121 is irrelevant in that scenario. If your tenant is a company or a specified person, Form 121 applies and can prevent TDS on your rental income.

Can a non-resident Indian (NRI) file Form 121 for interest on NRO deposits?

No. Form 121 under Section 393(6) is available only to resident taxpayers. Non-residents — including NRIs with NRO accounts — are not eligible to file Form 121. TDS on interest credited to NRO accounts is governed by Section 393(2) (payments to non-residents) and operates at rates applicable to non-residents. NRIs wishing to reduce TDS on NRO interest must either claim benefit under a Double Taxation Avoidance Agreement (DTAA) by submitting Form 10F and a Tax Residency Certificate, or apply for a lower TDS certificate under the relevant provisions for non-residents.

What are the penalties for filing a false Form 121 declaration?

Filing a false declaration in Form 121 — knowing that the nil tax condition or income ceiling condition is not met — constitutes a serious offence. Penalty under Section 271C of the Income-tax Act, 2025 can be levied for failure to comply with TDS obligations, and the taxpayer who filed the false declaration may face prosecution under Section 277 for furnishing false information in a declaration. Additionally, any tax that went undeducted due to the invalid declaration becomes payable by the declarant along with interest. Payers who accept facially invalid declarations (e.g., without PAN, or from companies) also face TDS default consequences.

My bank has already deducted TDS in April even though I submitted Form 121. What can I do?

If Form 121 was submitted before the income was credited but TDS was still deducted, the first step is to approach the bank's compliance or operations team with proof of submission (a stamped acknowledgement or the UIN issued by the bank). If the deduction was an error, the bank may be able to correct it in the same quarter's TDS return — however, once TDS has been deposited with the government, reversal becomes complex. In practice, the more reliable remedy is to claim the TDS as a credit in your ITR and receive a refund. Going forward, submit Form 121 early in the tax year (before the first working day of April) and retain written acknowledgement from each payer.

Does Form 121 cover interest earned on Post Office schemes like PPF or NSC?

PPF interest is entirely exempt from income tax under Schedule II of the Income-tax Act, 2025 and no TDS is deducted on PPF interest. Form 121 is therefore not needed for PPF. NSC interest is taxable but is not subject to TDS at source (it accrues and is taxed when declared in the ITR). Post office time deposits and post office savings account interest above ₹50,000 (for below 60) or ₹1,00,000 (for senior citizens) are subject to TDS from the post office, and Form 121 can be used to prevent TDS on such post office deposits under Section 393(1) Sl. No. 5(ii).

If I file Form 121 for my bank FD interest but I also have business income, do I still qualify?

It depends on whether your estimated total income — including both the FD interest and the business income — results in nil tax liability. You must compute total income from all heads (business, interest, any other source), apply all deductions under Chapter VIII, and determine if the final tax is nil. For individuals below 60, even if total tax is nil, the aggregate covered income (FD interest in this case) must not exceed the basic exemption limit. Business income itself does not affect the income ceiling condition directly — only the aggregate of Form 121-covered income matters for the ceiling test. However, business income may push total income above the threshold where the rebate under Section 156 applies, resulting in positive tax liability and disqualifying the entire Form 121 declaration.

Where can I download the official Form 121 for Tax Year 2026-27?

Form 121 is available for download from the official Income Tax Department website at incometaxindia.gov.in under the Forms section. Major banks also make the form available on their internet banking portals and at branch counters. Some payers accept electronic submission directly through their systems (e.g., net banking portals) where the form is pre-populated with your bank details and you only need to confirm and e-sign. Always download the latest version from official sources to ensure you are using the correct form for Tax Year 2026-27.

References & Official Sources

1. Income-tax Act, 2025 — Section 393 (Tax to be deducted at source) and Section 393(6) (Declaration for no deduction at source) — incometaxindia.gov.in
2. Income-tax Rules, 2026 — Rule 211 (Prescribing Form 121 as declaration form under Section 393(6)) — incometaxindia.gov.in
3. CBDT / CPC(TDS) Notification No. 1/CPC(TDS)/2026 (reported March 2026) — 26-character UIN format and payer reporting obligations — [Verify exact notification number on official source]
4. CBDT Official FAQ — "Form No. 121 (Earlier Form Nos. 15G & 15H) — FAQs" — Available on income tax e-filing portal
5. Income-tax Act, 1961 — Sections 197A(1), 197A(1A), and 197A(1C) [superseded by ITA 2025 for Tax Year 2026-27 onward]
6. Income-tax Rules, 1962 — Rule 29C [superseded by Income-tax Rules, 2026, Rule 211]
7. Finance Act, 2012 — Introduced Form 15H for senior citizens via Section 197A(1C)
8. TRACES Portal — tdscpc.gov.in — For UIN verification and TDS return compliance

Conclusion: What Every Taxpayer Must Do Before April 2026

Form 121 is not merely a renamed version of Forms 15G and 15H — it brings meaningful legal changes that require careful evaluation by every taxpayer who previously relied on nil-TDS declarations. For senior citizens aged 60 and above, the transition is straightforward: the nil tax condition remains, the income ceiling restriction continues not to apply, and the only change is the form number and the UIN requirement. For individuals below 60 and HUFs, the critical new discipline is to verify whether the aggregate of all covered income across all payers fits within the basic exemption limit — and not to assume that nil final tax (possibly due to the rebate under Section 156) automatically qualifies them for Form 121. For professionals, consultants, directors, and others receiving income excluded from Section 393(6), Form 121 offers no protection — a proactive application under Section 394 at the start of the tax year is the only lawful route to preventing TDS deduction from day one.

Submit Form 121 early, submit it to every payer separately, collect your UIN, and verify it in your AIS on the income tax portal. If you are uncertain about your eligibility — particularly the income ceiling test for below-60 filers — consult your tax advisor before the first interest credit of Tax Year 2026-27. A small planning investment at the start of April can prevent months of wait for a TDS refund.

Tax Queries