The Income Tax Department has introduced a new unified declaration form—Form No. 121—aimed at simplifying the process for taxpayers to avoid Tax Deducted at Source (TDS) on certain incomes. This change comes into effect from April 1, 2026, replacing the existing Form 15G and Form 15H.
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Single Form for All Eligible Taxpayers
Under the earlier system, individuals below 60 years of age were required to submit Form 15G, while senior citizens used Form 15H. With the introduction of Form 121, this distinction has been removed. Now, all eligible taxpayers—irrespective of age—can use a single form to declare their income status and request non-deduction of TDS.
Purpose of Form 121
Form 121 serves as a self-declaration by taxpayers stating that their estimated total income for the financial year is below the taxable limit, and therefore, their tax liability is nil. Based on this declaration, the payer (such as banks or financial institutions) will not deduct TDS on eligible payments.
Types of Income Covered
The declaration under Form 121 applies to a wide range of income sources, including:
- Interest on bank deposits
- Dividends
- Rent
- Insurance commission
- Payments related to life insurance policies
- Income from mutual funds
- Pension and provident fund (PF) withdrawals
Is Filing Form 121 Mandatory?
Filing Form 121 is not mandatory. It is only required for taxpayers who wish to avoid TDS, provided they meet the condition of having nil tax liability for the relevant financial year. The form must be submitted separately for each financial year.
Eligibility Criteria
Form 121 can be filed by:
- Resident individuals (both below and above 60 years of age)
- Hindu Undivided Families (HUFs)
- Certain specified entities
However, the following are not eligible:
- Companies and firms
- Non-residents
Submission Requirements
Taxpayers must submit Form 121 to each payer from whom they receive income. This ensures that TDS is not deducted across multiple income sources.
PAN is Mandatory
Quoting a Permanent Account Number (PAN) is compulsory while filing Form 121. Failure to provide PAN will render the declaration invalid, and the payer will be obligated to deduct TDS as per applicable provisions.
Conclusion
The introduction of Form 121 by the Income Tax Department marks a significant step towards simplifying tax compliance. By consolidating Forms 15G and 15H into a single, streamlined declaration, the move is expected to enhance convenience and reduce confusion for taxpayers across the country.
