Form 15G, Form 15H and the new Form 121 all do one job: they let an individual whose tax for the year will be nil ask a bank, company or other payer not to deduct TDS in the first place. Which form you use depends on the year the income is paid, not on who you are. This guide explains the switch from 15G/15H to Form 121, who can file, the income it covers, and the penalty for a false declaration.
TDS Exemption Forms at a Glance
| Point | Form 15G | Form 15H | Form 121 |
|---|---|---|---|
| Law | Section 197A(1)/(1A), Income-tax Act 1961 | Section 197A(1C), Income-tax Act 1961 | Section 393(6), Income-tax Act 2025 |
| Period | Income paid or credited up to 31 March 2026 (FY 2025-26 and earlier) | Income paid or credited up to 31 March 2026 | Income paid or credited from 1 April 2026 (tax year 2026-27 onward) |
| Who | Resident individual below 60 (and other persons that are not a company or firm) | Resident individual aged 60 or more at any time in the year | One form for both groups |
| Main condition | Tax on estimated total income is nil, and the income covered by the declaration does not exceed the basic exemption limit | Tax on estimated total income is nil | Same two tests as 15G/15H, depending on age |
| Given to | The payer (bank, company, EPFO, tenant etc.) | The payer | The payer |
Why Form 121 Replaced Form 15G and 15H
The Income-tax Act, 2025 applies from 1 April 2026. Section 393(6) of the new Act carries over the old Section 197A rule: no TDS is deducted if the recipient gives the payer a written declaration, in the prescribed form, that the tax on his estimated total income for the tax year will be nil. The Income-tax Rules, 2026 prescribe a single form, Form 121, in place of the two old forms.
So, for interest or other income paid in FY 2025-26, the declaration was Form 15G or 15H. For income paid from 1 April 2026, give Form 121. A declaration given for an earlier year does not carry forward; give a fresh one to each payer every year, ideally in April before the first credit.
Who Can File Form 121 (or 15G/15H)
- Resident individuals. Non-residents cannot use these declarations.
- Other persons that are not a company or a firm (for example an HUF) can use it for the same incomes except dividend, under the second row of the Section 393(6) table.
- Below 60: two conditions. The tax on your estimated total income must be nil, and the total of the incomes covered by the declaration, from all payers, must not exceed the maximum amount not chargeable to tax (the basic exemption limit, Rs 4 lakh under the new regime from FY 2025-26).
- 60 or above at any time in the year: only one condition, that the tax on estimated total income is nil. The basic exemption cap does not apply.
Income Covered
Under Section 393(6) of the 2025 Act the declaration can cover:
- Interest (bank and post office deposits, interest on securities, other interest)
- Dividend (individuals only)
- Rent (where the tenant is required to deduct TDS at 2% or 10%, for example a business tenant)
- Income from mutual fund units
- Insurance commission
- Payments under a life insurance policy
- Withdrawal of accumulated EPF balance
It does not cover salary, fees for professional or technical services, contract payments or commission other than insurance commission. A salaried person's employer computes TDS on estimated salary and deducts nothing when the estimated tax is nil. A freelancer whose tax will be low can apply to the Assessing Officer for a lower or nil deduction certificate, or claim the excess TDS as a refund in the ITR.
How to Submit the Declaration
- Ask the payer for its format. Most banks accept Form 121 (earlier 15G/15H) through net banking or at the branch.
- Fill in your PAN, status, residential status, the estimated income covered by this declaration, your estimated total income for the year, and details of other declarations given in the same year.
- Sign and submit it before the first interest or other payment of the year. A payer is not required to refund TDS already deducted before you submitted it.
- The payer allots a unique identification number and reports the declaration to the Income Tax Department. Under Section 393(7) it must send a copy to the prescribed income-tax authority by the 7th of the month after the month in which you gave it.
If your situation changes in the middle of the year and tax becomes payable, tell the payer in writing so TDS restarts.
Examples
Senior citizen, new regime (tax year 2026-27). Lakshmi, 67, earns Rs 9 lakh of FD interest and has no other income. Tax at new regime slabs: 5% on Rs 4 to 8 lakh = Rs 20,000, plus 10% on Rs 8 to 9 lakh = Rs 10,000, total Rs 30,000. Her total income is under Rs 12 lakh, so the Section 87A rebate (up to Rs 60,000; Section 156 of the 2025 Act) brings the tax to nil. Because she is over 60, she can give Form 121 even though her interest is above the basic exemption limit.
Individual below 60. Arjun, 25, has Rs 3.5 lakh of FD interest and no other income. Tax is nil and the interest is within Rs 4 lakh, so he can give Form 121. If his interest were Rs 5 lakh, tax would still be nil after the 87A rebate, but the income covered by the declaration would exceed the basic exemption limit, so he cannot give the form. The bank deducts TDS and he claims a refund in his ITR.
Penalty for a False Declaration
A false Form 15G, 15H or 121 is a false statement in a verification. Under Section 277 of the 1961 Act (Section 482 of the 2025 Act for Form 121), this carries rigorous imprisonment of 6 months to 7 years plus fine where the tax that would have been evaded exceeds Rs 25 lakh, and 3 months to 2 years plus fine in other cases. The tax that should have been deducted also becomes payable by you, with interest.
Do You Still Need to File an ITR?
The declaration only stops TDS. It is not a return. If your gross total income before deductions exceeds the basic exemption limit, you must file an ITR even though the tax works out to nil after the rebate. Filing also helps when a payer deducts TDS by mistake, since the refund can only be claimed through the return. For AY 2026-27 the due date for non-audit individuals without business income is 31 July 2026; the belated return deadline is 31 December 2026.
Checklist Before You Submit
- You are a resident individual (or a non-company, non-firm person, for incomes other than dividend)
- Tax on your estimated total income for the year is nil
- If below 60: the incomes covered by all your declarations together are within the basic exemption limit
- The income is interest, dividend, rent, MF units, insurance commission, life insurance payout or EPF withdrawal
- You are using Form 121 for income from 1 April 2026, and 15G/15H only for earlier years
Sources: Income-tax Act 1961, Sections 197A and 277; Income-tax Act 2025, Sections 393(6), 393(7) and 482; Income-tax Rules 2026 (Form 121).
