Form 121: The New TDS Declaration That Replaces Form 15G & 15H

If you submitted Form 15G or Form 15H to your bank last year to avoid TDS on your FD interest, here’s something important: those forms no longer exist. From April 1, 2026, both have been replaced by a single unified form — Form No. 121 — under India’s new Income-tax Act, 2025.

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Why Was Form 121 Introduced?

For decades, Indian taxpayers used two separate TDS exemption forms:

• Form 15G — for resident individuals below 60 years and HUFs
• Form 15H — for resident individuals aged 60 and above (senior citizens)

Both served the same purpose: declare to a payer that your total estimated income is below the taxable limit and request that TDS not be deducted. Yet, having two forms — differentiated purely by age — led to confusion, especially for first-time filers and senior citizens.

As part of a sweeping overhaul under the Income-tax Act, 2025, the government consolidated hundreds of forms. The number of income tax forms was reduced from 399 to 190. Form 121, notified under Section 393(6) read with Rule 211 of the Income-tax Rules, 2026, is one of the most impactful changes for everyday taxpayers.

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What Is Form 121?

Form 121 is a self-declaration you submit to a payer — your bank, post office, mutual fund company, or landlord — informing them:

“My estimated total income for this tax year is below the taxable limit and my tax liability is nil. Please do not deduct TDS from my income.”

It consists of two parts:

• Part A — Filled by the declarant (you). Covers your PAN, residential status, estimated income, nature of income, and a declaration that your tax liability will be nil.
• Part B — Filled and submitted by the payer (your bank or institution). They confirm receipt of your declaration and report it to the Income Tax Department.

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Form 121 vs. Form 15G vs. Form 15H: At a Glance

Feature	Form 15G (Old)	Form 15H (Old)	Form 121 (New)
Applicable from	Until Mar 31, 2026	Until Mar 31, 2026	April 1, 2026 onwards
Who files?	Below 60 years & HUFs	60 years and above	All eligible residents regardless of age
Key condition	NIL tax + interest below exemption limit	NIL tax liability	NIL estimated tax liability
Governing section	Section 197A, IT Act 1961	Section 197A, IT Act 1961	Section 393(6), IT Act 2025
UIN tracking	No	No	Yes — mandatory UIN by payer
Digital reporting	Quarterly	Quarterly	Monthly (upload) + Quarterly (Part B)

The simplification is clear: one form, one process, one compliance standard — regardless of your age.

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Who Can File Form 121?

Eligible to File:

• Resident individuals — both below 60 and 60 years or above
• Hindu Undivided Families (HUFs)
• Other specified entities that meet the eligibility criteria under Section 393(6)

NOT Eligible to File:

• Companies and firms — expressly excluded
• Non-residents (NRIs) — cannot use this form even if income arises in India
• Anyone with a non-nil tax liability — if you owe any tax, you cannot file this form

The One Golden Rule:

Your estimated total income for the tax year — including the income for which you’re seeking TDS exemption — must result in zero tax liability. This is calculated after considering applicable deductions under Chapter VIII of the Income-tax Act, 2025, set-offs, and rebates.

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Which Incomes Are Covered Under Form 121?

Form 121 applies to a wide range of income types where TDS would ordinarily apply. These include:

• Interest income — from bank fixed deposits, savings accounts, post office deposits, and other notified schemes
• Dividends — including dividend on preference shares, declared by domestic companies
• Mutual fund income — income from units of a mutual fund, specified undertaking, or specified company
• Rent — from a specified person
• Life insurance payouts — amounts received under a life insurance policy, including bonuses
• Insurance commission — for soliciting or procuring insurance policies
• Provident fund balance — accumulated balance due to an employee in a recognized provident fund

This is particularly relevant for retirees, homemakers, and individuals with income solely from savings instruments, FDs, and mutual funds — who often have zero or near-zero tax liability.

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How to File Form 121: Step-by-Step

Step 1: Check Your Eligibility

Calculate your estimated total income for the year — salary, interest, dividends, rental income, etc. After all deductions, if your tax liability comes to nil, you are eligible.

Step 2: Download the Form

Download Form 121 from the official Income Tax e-filing portal (www.incometax.gov.in) or obtain it from your bank’s branch or digital platform.

Step 3: Fill Part A

Provide:

• Full name (no abbreviations), PAN, and address
• Status (Individual / HUF / other)
• Residential status
• Tax year for which declaration is made
• Nature of income and estimated amount
• Details of any other Form 121 filed during the same tax year
• Estimated total income including income under declaration
• Details of ITR filed for the previous two tax years

Step 4: Submit to Each Payer Separately

If you have FDs in three banks, you must submit Form 121 to each bank individually. Submit before the income is credited or paid — late submission cannot reverse TDS already deducted.

Step 5: Retain a Copy

Keep a copy of the submitted form and acknowledge receipt from each payer for your records.

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The New UIN System: Greater Transparency

One of the most significant operational changes under Form 121 is the introduction of a Unique Identification Number (UIN) system.

When your bank or payer receives your Form 121, they must:

1. Assign a UIN to each declaration received. The UIN contains the payer’s TAN, tax year reference, and a running sequence number.
2. Upload a consolidated monthly statement of all Form 121 declarations received, through the e-filing portal using their TAN login.
3. File Part B of Form 121 on the e-filing portal every quarter — even if no TDS was deducted during the quarter.

This creates a fully digitized, auditable trail. The Income Tax Department can now automatically cross-verify TDS exemption claims, reducing mismatches and the scope for fraudulent declarations.

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Key Compliance Points to Remember

• PAN is mandatory. Without a valid PAN, your declaration is invalid and TDS will be deducted at the higher applicable rate.
• File before income is credited. Submitting Form 121 after TDS has been deducted will not result in a refund from the payer — you’ll need to claim it in your ITR.
• File every year. Form 121 is valid only for the tax year for which it is filed. You must renew it each year.
• File with each payer separately (for now). There is no centralized submission yet for FY 2026-27 — each bank, AMC, and bond issuer must receive its own declaration. A single NSDL/CDSL depository submission for demat bond holdings is expected from April 1, 2027.
• False declaration attracts penalties. Filing Form 121 when you are not eligible can lead to prosecution under Section 482 of the Income-tax Act, 2025.
• Payers must report even when no TDS is deducted. Banks and institutions cannot simply keep the form on file — quarterly reporting is now mandatory.

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What This Means for Mutual Fund Investors

If you receive income from mutual fund units — such as dividends from a dividend-payout scheme — and your total income is below the taxable limit, Form 121 is directly applicable to you. You would submit it to the mutual fund company (AMC) or registrar to prevent TDS deduction on such dividend income.

This is an often-overlooked area for retirees and conservative investors who depend on monthly or quarterly dividend payouts from debt and hybrid mutual funds for their regular income. With Form 121, such investors can now use a single, simpler form instead of navigating the old 15G/15H system.

At Meta Investment, we assist our clients in identifying such compliance requirements as part of holistic financial planning — ensuring you don’t lose money unnecessarily to avoidable tax deductions.

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Form 121 for Bond Investors: The NSDL/CDSL Single-Submission Advantage

If you hold corporate bonds, PSU bonds, government securities, or debentures in your demat account, Form 121 is equally relevant for you — but comes with a unique future benefit that bond investors should know about.

The Problem Today: Too Many Submissions

Unlike bank FDs where you deal with one or two banks, a diversified bond portfolio can have coupon income flowing from 5, 8, or even 15 different issuers. Under the current rules, you must submit Form 121 separately to each issuer or their Registrar and Transfer Agent (RTA) before the first coupon of the year is credited. Missing even one means TDS gets deducted, and you must wait until ITR filing to claim a refund.

For bond investors with a wide portfolio — a common profile among retirees and HNI investors — this has historically been a significant compliance burden.

What Budget 2026 Has Announced: One Submission to NSDL or CDSL

Union Budget 2026 addressed this pain point directly. A centralized depository submission mechanism has been proposed under which:

• You submit a single Form 121 directly to your Depository Participant (DP) — either through NSDL or CDSL.
• Your depository then electronically transmits your nil-tax declaration to all relevant bond issuers, AMCs, and companies where you hold demat securities.
• No more chasing individual RTAs or issuers — one declaration, one submission.

“Submit once to your depository. Your zero-tax status is shared automatically with all relevant institutions.”

This is a landmark change for fixed-income investors who hold a spread of bonds in their demat portfolio.

Important: This Facility Goes Live April 1, 2027

Here is the critical detail to note: the centralized NSDL/CDSL submission mechanism is not yet operational for FY 2026-27. It is expected to be formally notified and live from April 1, 2027 onwards.

For the current financial year (FY 2026-27), bond investors must continue with the existing approach — submitting Form 121 individually to each issuer or their RTA before the first coupon payment date.

What to Do Right Now (FY 2026-27)

Holding Type	Where to Submit Form 121	Timeline
Bank Fixed Deposits	Each bank (net banking / branch)	Before first interest credit
Corporate / PSU Bonds (demat)	Each issuer’s RTA individually	Before first coupon date
Post Office Schemes	Respective post office / portal	Before interest credit
Mutual Fund dividend plans	Respective AMC / RTA	Before dividend credit
Government Securities (demat)	Respective custodian / RTA	Before first coupon date

What to Watch For (FY 2027-28 Onwards)

Once the NSDL/CDSL mechanism is live, bond investors should:

• Confirm with their Depository Participant (DP) when the facility is operationally available.
• Submit Form 121 to their DP at the start of April each year to ensure coverage from the very first coupon.
• Note that bank FDs will still require separate submission to each bank — the demat-depository mechanism only covers securities held in demat form.

A Note for HNI Bond Portfolio Holders

For high net worth investors holding a diversified fixed-income portfolio — spanning PSU bonds, corporate NCDs, SGBs, and G-Secs — this upcoming change significantly reduces annual compliance friction. Combined with the UIN tracking system already active from FY 2026-27, the entire TDS exemption ecosystem for demat securities is moving towards near-full automation by FY 2027-28.

At Meta Investment, we keep our clients ahead of such regulatory changes — whether it’s the right time to lock into a bond, structure a debt ladder, or ensure your Form 121 submissions are timely and complete.

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Key Takeaways

• Form 121 replaces both Form 15G and Form 15H from April 1, 2026, under the Income-tax Act, 2025.
• It is a single, unified self-declaration for all eligible resident taxpayers, regardless of age.
• The key eligibility condition: your estimated tax for the year must be nil.
• Covers interest, dividends, mutual fund income, rent, insurance payouts, and PF balances.
• PAN is mandatory; declarations without PAN are invalid.
• For FY 2026-27, submit to each payer separately, before income is credited — banks, AMCs, and bond issuers individually.
• Payers must assign a UIN and report monthly and quarterly to the Income Tax Department.
• Filing is optional but highly beneficial if your income is below the taxable limit.
• A single-submission via NSDL/CDSL for demat bond holdings has been announced under Budget 2026 — expected to go live from April 1, 2027. Until then, per-issuer submission remains mandatory.

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Conclusion

Form 121 is a welcome simplification in India’s tax compliance landscape. For lakhs of retirees, homemakers, senior citizens, and individuals with modest savings-based income, this form is the shield that protects their interest income, dividends, and mutual fund payouts from unnecessary TDS deduction.

The change is effective now. If you or a family member used to submit Form 15G or 15H annually — switch to Form 121 this April itself. Submit it early in the financial year to ensure not a single interest payment is incorrectly taxed.

If you are unsure whether you are eligible, or if you need help understanding how Form 121 applies to your mutual fund investments, our team at Meta Investment is here to guide you.

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Mutual Fund investments are subject to market risks, read all scheme related documents carefully. This article is for educational and informational purposes only and does not constitute tax or legal advice. Please consult a qualified tax advisor or Chartered Accountant for advice specific to your situation.

Information sourced from the official Income Tax Department of India, Income-tax Act 2025, and Income-tax Rules 2026. Verify independently before acting.

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