Tax Deducted at Source, or TDS, is deducted on certain types of income such as bank interest, dividends and some withdrawals. If your total tax liability for the year is actually zero, this deduction can temporarily reduce the amount you receive, and you may have to wait until you file your income tax return to claim a refund.
From 1 April 2026, Form 121 has replaced the earlier Forms 15G and 15H. It is now the single self-declaration form that eligible resident taxpayers can submit to request that TDS should not be deducted, provided they meet the required conditions.
In this article, we will break down what Form 121 is, who can submit it and how it works in simple terms.
What is Form 121?
Form 121 is a self-declaration form that eligible resident taxpayers can submit to request that TDS should not be deducted from certain types of income. This applies only if their estimated total tax liability for the financial year is zero.
From 1 April 2026, Form 121 has replaced the earlier Forms 15G and 15H. Instead of having separate forms based on age, there is now a single unified declaration.
In simple terms, when you submit Form 121, you are stating that your total income for the year will not result in any tax payable. If the declaration is correctly filled and accepted by the payer, TDS may not be deducted on eligible income such as interest or dividends.
It is important to understand that Form 121 does not make your income tax-free. It only prevents tax from being deducted in advance when your final tax liability for the year is expected to be nil.
Why was Form 121 introduced?
Form 121 was introduced along with the Income-tax Act, 2025, which came into effect from 1 April 2026. As the new law updated and reorganised several provisions, related forms were also revised.
Earlier, taxpayers had to use different forms based on age. Form 15G was meant for individuals below 60 years, while Form 15H was for senior citizens. This created an age-based distinction in the declaration process.
Form 121 replaces both forms with a single unified declaration for eligible resident taxpayers. The intention is to make the process simpler and better aligned with the new tax framework.
Form 121 vs Form 15G and Form 15H
Before 1 April 2026, taxpayers used Form 15G or Form 15H to request non-deduction of TDS, but this process has now been simplified with the introduction of Form 121.
The key differences between the three forms are explained below:
| Particulars | Form 15G | Form 15H | Form 121 |
| Applicable period | Up to 31 March 2026 | Up to 31 March 2026 | From 1 April 2026 onwards |
| Who could use it? | Resident individuals below 60 years and certain other eligible persons | Resident senior citizens aged 60 years or above | Eligible resident taxpayers, irrespective of age |
| Age-based distinction | Yes | Yes | No separate form based on age |
| Governing law | Income-tax Act, 1961 | Income-tax Act, 1961 | Income-tax Act, 2025 |
| Relevant sections | Section 197A | Section 197A | Section 393(6) and 393(7) |
| Purpose | Declaration for non-deduction of TDS where tax liability is nil | Declaration for non-deduction of TDS where tax liability is nil | Unified declaration for non-deduction of TDS where tax liability is nil |
| Filing structure | Separate form based on age | Separate form based on age | Single consolidated declaration |
The main change is that Form 121 replaces both age-based forms with one unified declaration for eligible resident taxpayers. Instead of choosing a form based on age, taxpayers now use a single format, provided their estimated tax liability for the year is nil.
Who can file Form 121?
Before submitting Form 121, it is important to understand whether you meet the eligibility conditions, which are mainly based on your residential status and your estimated tax liability for the year.
Resident individuals
- You must be a resident individual under the income tax rules.
- Your estimated total tax liability for the financial year must be nil.
- Your total income should not result in any tax payable after considering eligible deductions and exemptions.
Individuals below 60 years of age
- The total income subject to TDS should generally not exceed the basic exemption limit.
- The final tax payable for the year must be zero.
Senior citizens
- You must be a resident senior citizen aged 60 years or above.
- Your estimated total tax liability for the financial year must be nil.
Hindu Undivided Families and certain other eligible resident persons
- A resident HUF may submit Form 121 if its estimated tax liability is nil.
- Certain other eligible resident assesses may also submit the form if they meet the prescribed conditions.
Who cannot file Form 121?
- Non-residents are not eligible to submit Form 121.
- Companies cannot use Form 121 for non-deduction of TDS.
- Partnership firms and LLPs are not eligible to file this declaration.
- Any person whose estimated tax liability is not nil should not submit Form 121.
Before filing the form, it is advisable to carefully estimate your total income and tax liability to ensure that you meet the eligibility conditions.
When should Form 121 be submitted?
To prevent TDS from being deducted from your income, Form 121 must be submitted at the right time:
- Form 121 should be submitted before TDS is deducted on your income.
- It is generally filed at the beginning of the financial year.
- It can also be submitted during the year, provided it is filed before the income is credited and TDS is applied.
- The form must be submitted separately to each bank or institution that is responsible for deducting TDS.
- If applicable, it may also need to be given to mutual fund houses or EPF authorities where TDS provisions apply.
- If the form is not submitted in time, TDS may be deducted at applicable rates.
- The deducted amount can later be claimed as a refund while filing your income tax return.
Submitting the form early can help avoid unnecessary deductions, provided you meet the eligibility conditions.
How to fill Form 121
Form 121 is generally divided into two parts.
Part I – Declarant details
This section is completed by the taxpayer and includes:
- Name and address
- PAN
- Date of birth and contact details
- Residential status
- Financial year for which declaration is made
- Estimated total income
- Nature of income
- Acknowledgment numbers of income tax returns filed for the last two tax years
- Details of other Form 121 declarations submitted to other payers, if any
- Verification and signature
The requirement to provide ITR acknowledgment details is an additional compliance feature compared to the earlier forms.
Part II – Payer details
This section is completed by the payer or deductor and includes:
- Name and address of payer
- TAN and PAN
- Unique Identification Number assigned to the declaration
- Income details and receipt information
The form must be submitted separately to each payer responsible for deducting TDS.
How can Form 121 be submitted?
Form 121 may generally be submitted:
- Physically to banks or institutions
- Through online banking portals
- Through financial institution websites
For investors holding securities in demat form, submission may also be facilitated through depositories such as NSDL or CDSL, subject to their prescribed process.
A fresh declaration is typically required for each financial year.
Important conditions and rules for Form 121
Before submitting Form 121, it is important to understand the key rules that apply to its use:
- Form 121 is valid only for the financial year for which it is submitted.
- A new declaration is generally required for each financial year.
- The form must be submitted separately to each payer who may deduct TDS.
- Your estimated total tax liability for the financial year must be nil at the time of submission.
- All sources of income should be considered before confirming that no tax is payable.
- Submitting Form 121 does not automatically remove the requirement to file an income tax return, if otherwise applicable.
- Providing incorrect or false information in the declaration may attract consequences under applicable tax laws.
Benefits of filing Form 121
If you meet the eligibility conditions, filing Form 121 may help in the following ways:
Improved cash flow
You may receive your income without TDS being deducted upfront, which means more money remains available to you during the year.
Reduced dependence on refunds
By preventing unnecessary TDS, you may avoid waiting for a refund after filing your income tax return.
Simpler declaration process
A single unified form replaces the earlier age-based Forms 15G and 15H, making the process easier to understand.
Better tax planning clarity
Submitting the form encourages you to review your total income and estimate your tax liability in advance.
Common Mistakes to Avoid While Filing Form 121
While Form 121 may seem straightforward, certain common errors can lead to unnecessary TDS deductions or compliance issues:
Not estimating total income correctly
You should include all sources of income for the financial year before concluding that your tax liability is nil.
Ignoring additional taxable income
Income such as pension, rental earnings, interest from multiple banks, or other receipts should be considered while calculating total income.
Submitting the form after TDS is deducted
Form 121 must be submitted before the income is credited, otherwise TDS may still be deducted.
Providing incorrect PAN or personal details
Incorrect information may result in rejection of the declaration or deduction of TDS at higher rates.
Filing the form despite having tax liability
Form 121 should not be submitted if your estimated tax payable for the year is more than zero.
Conclusion
Form 121 replaces Forms 15G and 15H from 1 April 2026 with a single declaration format, making the TDS process simpler for eligible resident taxpayers. If your estimated tax liability for the financial year is nil, submitting the form on time may help prevent unnecessary TDS deductions and reduce the need to claim refunds later. However, it is important to review your total income carefully before filing the declaration to ensure that no tax is payable. As tax rules and individual situations can vary, seeking professional guidance may help you determine whether Form 121 is suitable for you.
FAQs
What is Form 121?
Form 121 is a self-declaration form under the Income-tax Act, 2025 that allows eligible resident taxpayers to request non-deduction of TDS if their estimated total tax liability for the financial year is nil. It replaces Forms 15G and 15H from 1 April 2026.
Is Form 121 mandatory?
No, Form 121 is not mandatory. If you do not submit it, TDS may be deducted at applicable rates, and you can claim a refund later while filing your income tax return.
Who can submit Form 121?
Resident individuals, including senior citizens, Hindu Undivided Families (HUFs), and certain other eligible resident taxpayers can submit Form 121, provided their estimated tax liability for the financial year is zero.
Does Form 121 replace Form 15G and Form 15H?
Yes, Form 121 replaces Forms 15G and 15H with effect from 1 April 2026 under the Income-tax Act, 2025, introducing a single unified declaration format.
Can Form 121 be submitted online?
Yes, Form 121 can usually be submitted online through banks, financial institutions, or investment platforms that provide this facility, subject to their internal process and verification requirements.
Is Form 121 applicable to EPF withdrawals?
Yes, Form 121 may be used to request non-deduction of TDS on certain EPF withdrawals where TDS is otherwise applicable, provided you meet the eligibility conditions and your estimated tax liability is nil.
