Form 121: The New No-TDS Form Replacing 15G and 15H

If you have a fixed deposit, dividends or rental income and your total income stays below the tax limit, you have probably filled Form 15G or Form 15H to stop your bank from chopping TDS off your interest. From this financial year, both of those forms are gone. In their place sits a single new declaration: Form 121.

The switch took effect on 1 April 2026, the start of Tax Year 2026-27, the first full year under the new Income Tax Act 2025. If you bank on FD interest and want every rupee credited without tax deducted at source, this is the one form you now need to understand — and a few people are about to get it wrong.

What Form 121 actually is

Form 121 is a self-declaration you give to whoever pays you income — your bank, NBFC, post office or a company paying dividends. By filing it, you are telling the payer: my total tax for the year will be nil, so please do not deduct TDS.

It is issued under Section 393 of the Income Tax Act 2025, read with the Income Tax Rules 2026. The job it does is exactly the same as the old forms — but instead of two forms split by age, there is now just one. The government's stated aim is to simplify a process that confused lakhs of depositors every year.

Crucially, Form 121 is not a tax exemption. It does not reduce what you owe. It only stops money being held back at source when you would have owed nothing anyway — saving you the hassle of claiming a refund months later.

The big change: one form, every age

Under the old system, your age decided your form:

• Form 15G was for residents below 60 years.
• Form 15H was for senior citizens aged 60 and above.

That split is finished. Form 121 is age-agnostic — a resident individual of any age, as well as a Hindu Undivided Family (HUF), files the same form. A 35-year-old salaried saver and a 70-year-old pensioner now use identical paperwork.

This matters for families managing multiple deposits. Earlier, a household might juggle 15G for the children and 15H for the parents. Now everyone is on the same page, which makes joint financial planning a little cleaner.

The one rule that trips people up

The single most misunderstood point: low income is not enough — your tax liability must be zero.

Form 121 is valid only if your estimated total income for the year, after all eligible deductions, leaves you with nil tax payable. People routinely confuse "my income is small" with "I owe no tax," and a wrong declaration is a false statement to the tax department, which can attract penalties.

Here is where the current numbers help. Under the new tax regime, the basic exemption is ₹4 lakh, and a rebate means most people with taxable income up to ₹12 lakh end up paying no tax. So a far larger group genuinely qualifies for nil liability than did a few years ago. But you must do the arithmetic on your whole income — salary, capital gains, every interest payout — not just the one FD in front of you.

If adding up everything pushes you into a tax-paying bracket, you cannot file Form 121, even by a rupee. In that case, let the TDS be deducted and claim credit when you file your return.

Why this connects to the FD interest limits

Form 121 only becomes relevant once your interest crosses the TDS threshold, because below it the bank does not deduct anyway. Those thresholds were raised generously and are worth memorising:

• ₹50,000 of interest a year for ordinary depositors before TDS kicks in.
• ₹1,00,000 a year for senior citizens.

So if your annual FD interest at a bank stays under your limit, no TDS is deducted and you need not file anything. The form is for the saver who does cross the threshold but still owes no overall tax — the retiree living on deposit interest is the classic example.

Remember these limits are reckoned per payer, aggregated across that bank's branches. Spreading deposits across several banks is one legitimate way to keep each one below the trigger, though it means tracking more accounts.

PAN is non-negotiable

Form 121 has a Part A filled by you, the declarant, and Part B completed by the payer. The make-or-break field is your PAN.

Without a valid PAN, the declaration is simply invalid. The bank is then required to deduct TDS at the applicable rate as if you had filed nothing — and TDS without PAN can be steeper. Before you submit, double-check that the PAN on the form matches your bank records and that it is active and linked to Aadhaar, or the whole exercise fails.

The form also asks you to disclose income on which you have filed similar declarations elsewhere, so the system can see your total picture. Be honest and complete; gaps here are what turn an innocent saver into someone with a penalty notice.

How and when to file it

Timing is everything, because TDS is deducted at the moment interest is credited. File late and the deduction has already happened — then you are back to claiming a refund.

A simple checklist:

1. File early in the year, ideally in April, before the first interest credit.
2. Submit to each payer separately — every bank, NBFC and company owes its own copy. One declaration does not cover all your accounts.
3. Use net banking where possible. Most banks accept Form 121 online through their portal; otherwise file it at the branch.
4. Keep the acknowledgement the payer generates, in case of a later query.
5. Repeat every single year. Form 121 is valid for one tax year only and does not auto-renew.

That last point catches even careful savers. A declaration filed in 2026 does nothing for 2027. Set a recurring reminder for early April.

What it means for you

For the vast majority of depositors, Form 121 is good news dressed as paperwork: fewer forms, no age confusion, and a higher tax-free band that means more people legitimately qualify. The mechanics are familiar — only the name and the single-form structure are new.

The risks are the same old ones, just under a new heading. File it when you actually owe tax, and you have made a false declaration. Forget your PAN, and it is void. Skip a year, and TDS quietly returns. Get those three things right, and Form 121 does exactly what the old duo did — keeps your own money in your hands until you settle up at filing time, instead of lending it to the government interest-free for a year.