With the Income Tax Act, 2025 coming into effect from April 1, 2026, the government has introduced Form 121, replacing Forms 15G and 15H to streamline tax compliance and reduce confusion for taxpayers.
The new Act aims to simplify the tax framework by consolidating provisions and reducing forms from 399 to 190. As part of this effort, Form 121 now serves as a single declaration for all eligible taxpayers to avoid Tax Deducted at Source (TDS).
Earlier, individuals had to choose between Form 15G and Form 15H depending on eligibility, with senior citizens (60+) using Form 15H and others using Form 15G. Form 121 eliminates this distinction, allowing all depositors to submit a single form to declare that their estimated total income tax liability for the tax year is nil.
Once submitted to the payer, such as a bank, the declaration ensures that no TDS is deducted on eligible income. This is particularly relevant for interest earned on fixed deposits. Taxpayers with monthly interest payouts should submit Form 121 in April to avoid deductions throughout the Tax Year 2026–27.
The form also applies to other income types, including provident fund withdrawals, pensions, insurance commissions, rent, mutual fund income, life insurance payouts, and dividends.
Form 121 is valid for one tax year (April 1, 2026 to March 31, 2027) and must be submitted every year if applicable. For example, individuals with long-term fixed deposits must file the form annually to avoid TDS each year.
If the form is not submitted on time, TDS will be deducted if interest income exceeds ₹1,00,000 for senior citizens or ₹50,000 for others. The standard TDS rate is 10%, which increases to 20% if PAN details are not provided.
Taxpayers must submit Form 121 separately to each payer, including multiple banks, post offices, or other income sources.
In case TDS is deducted due to delayed submission, taxpayers can claim a refund while filing their Income Tax Return (ITR). However, timely submission helps avoid unnecessary deductions and simplifies the filing process.
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