In this guide
Form 121 is the combined declaration replacing Forms 15G and 15H under the Income-tax Act, 2025. Eligible taxpayers can submit it to receive specified income without deduction of tax at source.
For Tax Year 2026-27, covering April 1, 2026 to March 31, 2027, use the new form and check the applicable eligibility conditions.
Form 121 does not exempt income from tax. It prevents TDS on covered payments where the legal conditions are met.
Who Can Submit Form 121?
The declaration is made under Sections 393(6) and 393(7) of the Income-tax Act, 2025, read with Rule 211 of the Income-tax Rules, 2026.
Eligibility depends on residential status, age, income category and estimated tax liability.
| Declarant | Main conditions |
|---|---|
| Resident individual below 60 | Tax on estimated total income must be nil, and aggregate specified income must not exceed the applicable maximum amount not chargeable to tax |
| Resident individual aged 60 or more during the tax year | Tax on estimated total income must be nil; the additional specified-income ceiling does not apply |
| Eligible resident HUF or other permitted person | Nil estimated tax liability and the applicable specified-income ceiling, subject to the income category |
| Company or firm, including LLP | Not eligible |
| Non-resident seeking the ordinary resident declaration facility | Not eligible |
Having no tax payable does not automatically make every taxpayer eligible. Where the additional specified-income ceiling applies, both conditions must be met.
Is the Rebate Limit the Same as the Eligibility Limit?
No. A rebate that reduces tax to nil is different from the maximum amount not chargeable to tax.
For example, a taxpayer below 60 might owe no final tax after an applicable rebate. However, if their aggregate specified income exceeds the relevant basic exemption limit, the additional eligibility condition can still prevent submission.
The additional specified-income ceiling does not apply to eligible resident senior citizens, but their estimated tax liability must still be nil.
Calculate income from all relevant sources before signing—not just interest from one fixed deposit.
Which Payments Are Covered?
Depending on the statutory payer and recipient conditions, covered categories include:
- Bank, co-operative bank and post-office interest;
- Certain other interest and interest on securities;
- Specified rent payments;
- Income from specified units;
- Insurance commission;
- Certain life-insurance payments;
- Dividends paid by domestic companies;
- Qualifying accumulated recognised provident-fund payments.
The permitted recipient category is not identical for every payment. A declaration valid for bank interest does not necessarily apply to every other receipt.
Form 121 is not a blanket solution for preventing TDS on salary, professional fees or all business receipts.
What Information Should You Prepare?
Keep these details ready:
- Valid and operative PAN;
- Name, address, contact details and residential status;
- Date of birth or age information;
- Correct tax year;
- Deposit, investment or other income identifiers;
- Estimated income covered by this declaration;
- Details of earlier Form 121 declarations during the year;
- Aggregate income covered by those declarations;
- Estimated total income and tax calculation;
- Previous return details requested in the form.
Include income across banks and other payers. Splitting deposits does not remove the requirement to consider aggregate income.
How to Submit Form 121
1. Estimate Your Annual Income and Tax
Include interest, pension, salary, rent, investment income and other relevant receipts. Apply the appropriate tax rules, deductions and rebate conditions.
Do not sign a nil-tax declaration based solely on your bank balance.
2. Obtain the Current Form
Use Form 121 provided by the Income Tax Department or the payer’s current facility.
Part A is completed by the taxpayer. Part B concerns the payer’s verification and reporting.
3. Complete the Declaration
Enter the correct tax year, income information and details of previous declarations. Provide earlier ITR details where requested.
Check that the amounts agree with your annual estimate. Read the declaration before signing: false or incorrect information can have legal consequences.
4. Submit It to Each Relevant Payer
Submit electronically through the payer’s supported facility or provide a signed paper form.
A declaration given to one bank does not automatically cover another bank, company or institution. Retain the acknowledgement and a copy.
5. Check Subsequent Payments
Confirm that the payer has recorded the declaration. Monitor interest certificates and tax-credit records for unexpected deductions.
When Should You Submit It?
Preferably submit at the start of the tax year, before the relevant income is credited or paid. There is no single annual taxpayer submission date covering every payment.
The payer’s separate reporting obligation generally falls on the seventh day of the month following the quarter. This is not the taxpayer’s deadline for preventing an earlier deduction.
TaxClear’s Form 140 reporting guide explains related deductor compliance.
What if TDS Has Already Been Deducted?
Submitting Form 121 later does not automatically reverse an earlier deduction.
Check the tax credit and claim any eligible refund through the applicable income tax return. If your income estimate changes and you no longer qualify, promptly inform the payer.
For assistance checking eligibility and estimating tax, contact TaxClear’s tax consultation team.
Frequently Asked Questions
Has Form 121 replaced both Forms 15G and 15H?
Yes. It combines them under the new framework while retaining different eligibility conditions.
Can an NRI submit it for ordinary bank interest?
No. The ordinary declaration facility requires resident eligibility.
Must I submit it separately to each payer?
Yes. Each relevant payer needs its own declaration.
Does Form 121 remove the need to file an ITR?
No. Return-filing obligations must be checked separately.
Can I use a depository instead during Tax Year 2026-27?
Do not assume so. The statutory depository submission facility for specified securities-related income takes effect from April 1, 2027, subject to its conditions.
