Form 121 TDS Exemption Declarations Replacing 15G and 15H

If you are a senior citizen who has filed Form 15H every April for the last decade, or an SME owner whose grown-up children receive bond interest, the form has changed. From April 1, 2026, a single Form 121 replaces both 15G and 15H. The rules for who qualifies are largely the same, but the form, the tracking number, and the submission flow are new.

This guide covers two audiences in sequence. First, the individual submitter who wants to stop unnecessary TDS. Then the deductor (bank, NBFC, company, mutual fund) who has to accept Form 121 and issue UINs.

What Changed from April 1, 2026

Under the old 1961 Act, there were two declarations:

• Form 15G for resident individuals under 60, and other persons that are not a company or firm (such as HUFs), with nil tax liability.
• Form 15H for resident senior citizens (60 and above) with nil tax liability.

The two forms were functionally similar apart from age, and payers had to run two workflows.

From April 1, 2026, under Section 393(6) of the Income Tax Act 2025:

• Both forms are abolished. Form 121 is the single replacement.
• A 25-year-old and an 80-year-old use the same form, but age still matters for eligibility: the Note to Section 393(6) keeps the old 15G income cap for declarants below 60 (see the nil tax test below).
• The eligibility conditions carry forward mostly unchanged.

Who Can Submit Form 121

Form 121 is available to:

• Resident individuals of any age, whose estimated tax on total income for the tax year is nil.
• Any other person that is not a company or a firm (for example an HUF), meeting the same nil-tax test, for all covered incomes except dividend.

Form 121 is not available to:

• Non-Resident Indians (NRIs).
• Companies.
• Partnership firms and LLPs.
• Any entity whose estimated tax for the year is not nil.

The Nil Tax Test

Your estimated total tax on total income for the tax year must be nil, after giving effect to:

• The slab rates under your chosen regime (new regime is the default).
• Chapter VIA deductions (if you opted for the old regime).
• The Section 87A rebate, which brings tax to nil for resident individuals with total income up to Rs 12,00,000 under the new regime for tax year 2026-27 (not on special-rate capital gains).

The extra test below 60. If you are below 60, a second condition applies: the total of the incomes covered by your declarations, from all payers, must not exceed the maximum amount not chargeable to tax (the basic exemption limit, Rs 4 lakh under the new regime). So a 30-year-old with Rs 6 lakh of FD interest and no other income pays nil tax after the 87A rebate, but still cannot give Form 121.

Senior citizens (60 or above at any time in the tax year) only need the nil-tax test. A 70-year-old with Rs 10 lakh of FD interest (tax before rebate Rs 40,000, fully covered by the 87A rebate) can give Form 121. This carries forward the old Form 15H rule.

If you expect any tax liability (for example because of short-term capital gains, rental income above the basic exemption, or business profits), Form 121 is not the right instrument. Banks will deduct TDS and you will claim a refund or adjustment at filing.

Income Types Covered

Form 121 can prevent TDS on the following income types listed in the Section 393(6) table:

Non-individual restriction: a person that is not an individual, company or firm (for example an HUF) can use Form 121 for categories (a) to (f) above, but not for dividends (category g).

How to Submit Form 121 as an Individual

Form 121 is submitted once per payer, not once per PAN per year. If you have FDs with three banks, dividends from two companies, and rent from one tenant, you file six Form 121 declarations.

The practical sequence:

1. Estimate your total income for FY 2026-27 from all sources.
2. Verify nil tax liability after slab and rebate. If you owe any tax, Form 121 is not appropriate.
3. Quote your PAN. A declaration without PAN is not valid, and the payer deducts TDS at the higher no-PAN rate (generally 20%).
4. Download Form 121 from the incometaxindia.gov.in forms repository or your deductor's portal.
5. Fill in identity details, PAN, the estimated income breakdown, and the specific income type the declaration covers.
6. Submit to each deductor physically or through their online declaration portal. Most banks now accept e-submission through net banking.
7. Keep the acknowledgement or reference number the deductor gives you, in case you need to reconcile with your AIS later.

A Form 121 submitted in April covers TDS for the full financial year. If you switch banks, buy new FDs mid-year, or take up a new mutual fund, you must file a fresh Form 121 with the new deductor before they credit or pay the income.

For a full breakdown of how bank FD TDS thresholds work, including multi-bank scenarios, cumulative FD accrual rules, and what to do if TDS has already been deducted, see TDS on Bank FD Interest: Rates, Thresholds & Form 121 (FY 2026-27).

How Deductors Process Form 121 and Issue UINs

If you are a bank, NBFC, company, mutual fund, insurance company, or any other deductor, Form 121 is processed at three points.

At receipt. Check the declarant's PAN and that the declarant is eligible (a resident individual, or a person other than a company or firm for categories other than dividend). Record the declaration and allot it a unique identification number, as payers did for 15G and 15H.

Reporting to the department. Section 393(7) of the 2025 Act requires the payer to deliver a copy of each declaration to the prescribed income-tax authority on or before the 7th day of the month following the month in which it was received. Follow the Income-tax Rules 2026 and the TDS return (Form 140) instructions for how the declaration details are reported in the quarterly statement.

Late Filing and Consequences of Wrong Declaration

Form 121 must be submitted before the first credit or payment event of the financial year at that deductor. If you submit after interest has already been credited to your account, TDS on that credit is not reversed. It will reflect in your 26AS and can only be recovered as a refund at ITR filing.

Knowingly filing a Form 121 when your tax will not be nil is a false declaration. The consequences:

• The tax that should have been deducted becomes payable by you, with interest if it pushes up your advance tax shortfall.
• A false statement in a verification is a prosecutable offence. Under Section 277 of the 1961 Act (which governed 15G and 15H) it carried rigorous imprisonment of 3 months to 7 years plus fine where the tax evaded exceeded Rs 25 lakh, and 3 months to 2 years plus fine otherwise.

Do not file Form 121 to "buy time" on TDS if you expect actual tax liability. The compliance cost of a false declaration is far higher than the working-capital benefit of deferred TDS.

Common Mistakes to Avoid

• Submitting old Form 15G or 15H in April 2026. They are invalid. The bank will accept the paper and then ignore it, or reject it outright. Either way, TDS deduction continues.
• Forgetting the PAN. A Form 121 without PAN is not valid, and the deductor applies TDS at the higher no-PAN rate (generally 20%).
• Assuming one declaration covers all payers. Form 121 is strictly per-payer. File fresh with each new bank, company, or mutual fund.
• Filing when you have capital gains. The 87A rebate does not cover special-rate gains on listed shares and equity funds, so even modest gains can make your tax non-nil. Then Form 121 is inappropriate.
• Not keeping the payer's reference number for each declaration. It helps you reconcile against your AIS if a discrepancy shows up later.
• Filing mid-year for past credits. Form 121 is prospective. It cannot reverse TDS already deducted on earlier credit events.

Let Tax Garden Manage Your Declarations

Individual taxpayers with multiple FDs, bond holdings, and mutual fund positions often miss Form 121 filings with two or three deductors every year, leading to working-capital stuck with the department until refund.

Explore Tax Garden's Compliance Standard plan. We file Form 121 with each of your deductors before the first credit of the year, log every UIN, and reconcile against your 26AS and AIS quarterly. No missed declarations, no avoidable TDS, no refund queue.

This guide is current as of April 15, 2026 and reflects the Income Tax Act 2025 effective April 1, 2026. Eligibility conditions, the below-60 income cap, the restriction on dividend declarations by non-individuals, the income types covered and the payer's reporting duty are from Section 393(6) and 393(7) of the Income-tax Act 2025. Confirm specific declaration requirements with your deductor before submission.

Frequently Asked Questions

I submitted Form 15H to my bank in 2025. Do I need to file Form 121 now?

Yes. A declaration is valid only for the financial year in which it is given, so a Form 15H from 2025 does not cover interest credited from 1 April 2026. Submit Form 121 to each bank or payer at the start of the tax year, before the first interest credit, to avoid TDS being deducted.

Can NRIs use Form 121 to avoid TDS on NRO interest?

No. Form 121 is only for residents. A non-resident who expects little or no tax in India can apply to the Assessing Officer for a lower or nil deduction certificate, claim the lower DTAA rate with a Tax Residency Certificate, or claim a refund of excess TDS when filing the ITR.

What if the bank deducted TDS before I submitted Form 121?

TDS already deducted will not be reversed, because the declaration works only for future credits. The deducted amount appears in your AIS and Form 26AS, and you can claim it as a refund by filing your ITR for that year. Submit Form 121 immediately so that later interest credits are not taxed.

Can I give Form 121 if I will have capital gains this year?

Only if your estimated tax for the whole year, including the capital gains, is still nil. The Section 87A rebate does not cover special-rate gains on listed shares and equity funds, so even modest short-term gains can create a tax liability. If any tax is payable, do not submit Form 121.

Do I need to submit a separate Form 121 to each bank or company?

Yes. Form 121 is given to each payer separately, so FDs with three banks need three declarations, and a new FD or bond with a new payer mid-year needs a fresh one before the first credit. Each payer issues its own reference number, which is useful when checking your AIS.