Here’s an explainer on what this means.
What is Form 121?
Form 121 is a self-declaration submitted by taxpayers stating that their estimated total income for the financial year is nil, and therefore no TDS should be deducted on specified incomes.
Once submitted to the payer—such as a bank or employer—the entity will not deduct tax at source, provided the declaration is valid.
What changes from Form 15G & 15H?
The biggest shift is consolidation.
Earlier:
Form 15G → for individuals below 60 years
Form 15H → for senior citizens (60+)
Now:
Form 121 → single form for all eligible individuals, regardless of age
This removes the need to choose between forms based on age, making compliance more streamlined.
Who can file Form 121?
Eligible users include:
- Resident individuals (both below and above 60 years)
- Hindu Undivided Families (HUFs)
- Certain other eligible entities
Not eligible:
- Companies and firms
- Non-residents
What income is covered?
Form 121 can be used to avoid TDS on a wide range of income types, including:
- Interest on bank deposits
- Dividends
- Rent
- Insurance commissions
- Mutual fund income
- Life insurance payouts
- Provident Fund (PF) withdrawals and pensions
Is it mandatory?
No. Filing Form 121 is optional.
It is meant only for taxpayers who:
- Expect zero tax liability, and
- Want to avoid upfront TDS deduction
If you don’t submit it, TDS will be deducted as usual, and you can later claim a refund while filing returns.
How is it submitted?
By the taxpayer:
- Physically or online (if the payer offers digital submission)
By the payer:
- Must upload details electronically on the income tax e-filing portal
- Report such transactions in quarterly TDS statements (Form 140)
What should taxpayers watch out for?
While the new form simplifies structure, compliance responsibility remains high:
- Incorrect declaration (when tax is actually payable) can invite penalties
- Multiple income sources mean multiple filings
- Timing is crucial—late submission won’t stop TDS
