Form No. 121 Under the Income Tax Act, 2025: A Comprehensive Guide to Declaration for Receipt of Income Without TDS Deduction

Overview and Background

The Income Tax Department, under the Ministry of Finance, Government of India, has introduced Form No. 121 as a unified declaration mechanism under Section 393(6) of the Income-tax Act, 2025. This new form consolidates and replaces the previously existing Forms 15G and 15H, which were governed under Section 197A(1), Section 197A(1A), and Section 197A(1C) of the Income-tax Act, 1961, and Rule 29C of the Income-tax Rules, 1962.

Under the revised framework, Form No. 121 is governed by Rule 211 of the Income-tax Rules, 2026 and serves as the single, standardized self-declaration instrument for eligible assessees seeking to receive specified categories of income without deduction of tax at source (TDS).

What is Form No. 121 and What Does It Seek to Achieve?

Form No. 121 is a self-declaration submitted by an eligible assessee to the relevant payer, declaring that the estimated total income for the applicable Tax Year will be nil — meaning no tax liability arises. On the strength of such a declaration, the payer is relieved from the obligation to deduct TDS on the income payable or credited to the assessee.

This mechanism serves a critical purpose: it prevents unnecessary deduction of tax at source from assessees whose overall income falls below the taxable threshold, thereby eliminating the inconvenience of claiming refunds later during return filing.

Important Note: Filing a declaration in Form No. 121 does not exempt the income from income tax per se. It solely prevents TDS from being deducted, provided all prescribed conditions are satisfied.

Who Can File Form No. 121? — Eligibility Criteria

Eligible Categories

The following categories of assessees are eligible to file Form No. 121:

• Resident Individuals below the age of 60 years — equivalent to those who previously filed Form 15G
• Resident Individuals aged 60 years or above — equivalent to those who previously filed Form 15H
• Hindu Undivided Families (HUFs)
• Other specified entities that satisfy the stipulated eligibility conditions

Ineligible Categories

The following are expressly not permitted to file Form No. 121:

• Companies (as defined under applicable laws)
• Firms (partnership or limited liability)
• Non-residents — irrespective of age or income level

The key eligibility condition applicable across all eligible categories is that the estimated tax liability for the Tax Year must be nil.

Earlier Distinction Between Forms 15G and 15H (Now Merged)

Previously, the two forms had distinct eligibility conditions:

1. Form 15G — For resident individuals below 60 years and HUFs, where:

   • No tax liability existed for the year, and
   • Total interest income remained below the basic exemption limit

2. Form 15H — For resident individuals aged 60 years or above, where:

   • Estimated total income, after applicable deductions, fell below the taxable threshold

Both conditions have now been absorbed into the unified Form No. 121, which applies to all eligible assessees irrespective of age.

Categories of Income Covered Under Form No. 121

Form No. 121 applies to the following categories of income, where TDS would ordinarily be deductible:

• Interest income — including interest on bank deposits, post office deposits, and other similar deposit instruments
• Dividend income
• Rent
• PF withdrawals and Pension-related receipts
• Income from Mutual Funds
• Payments in respect of Life Insurance Policies
• Insurance Commission
• Other specified income categories as notified

Is Filing of Form No. 121 Mandatory?

No. Filing of Form No. 121 is entirely optional. It is intended exclusively for those assessees who:

1. Do not wish to have tax deducted at source on their eligible income, and
2. Whose estimated total income for the Tax Year is likely to be nil