What changed
Form 121 is a declaration that the tax on the declarant’s estimated total income for the tax year will be nil. On the strength of it, the payer, such as a bank or company, does not deduct tax at source. It takes the place of Rule 29C and Forms 15G and 15H under the 1961 Act, and applies to declarations for any tax year beginning on or after 1 April 2026.
Individuals below 60, HUFs and other eligible persons must meet two conditions: the tax on estimated total income is nil, and the total of the incomes covered by declarations does not exceed the amount not chargeable to tax. A resident individual aged 60 or more needs only the first condition. The declaration is not valid without the declarant’s PAN.
The form has two parts: Part A is the declaration and Part B is completed by the payer. The payer allots an identification number to each declaration, keeps the form, and reports the payments made without TDS in its quarterly TDS statement (Form 140).
A declarant with more than one payer gives a separate Form 121 to each, and declares in each form the total amount covered by declarations given to others. The form is given at the start of the tax year, or before the first payment, because it covers only payments made after it is received. A payer that receives an invalid form, for example one without PAN or where the income limit is clearly crossed, deducts tax as usual.
Who is affected
Individuals, including senior citizens, and other persons whose interest or dividend income is below the taxable level, and the banks and companies that pay them.
Effective dates
| Item | Date or period |
|---|---|
| Income-tax Rules, 2026 notified | 20 March 2026 |
| Form 121 applies | Declarations for Tax Year 2026-27 onwards (from 1 April 2026) |
| Forms 15G and 15H | Used for years up to FY 2025-26 |
What to do now
- Check both conditions on your own estimated income before giving the form.
- Give a fresh Form 121 to each bank or payer early in the tax year, before interest is credited.
- Payers: allot the identification number, keep the declaration and report it in Form 140.
- If income rises during the year so that tax is no longer nil, inform the payer.
Penalty or consequence if missed
A false declaration in Form 121 is an offence: under the 1961 Act a false statement in a verification attracted prosecution under Section 277, and the 2025 Act carries it in Section 482, whose punishment was amended by the Finance Act, 2026. The tax not deducted remains payable by the declarant, with interest. A payer that skips TDS on an invalid declaration can be treated as an assessee in default.
Official source
Income-tax Rules, 2026, Rule 211 and Form No. 121; Income-tax Act, 2025, Section 393(6) and (7).
Effective: Tax Year 2026-27 · Note published · Last reviewed
Related on this site
- Form 15G / 15H (Form 121) checker
- Income Tax Act 2025 section finder
- Income tax return filing
- Income tax tools
- Compliance calendar
This note summarises a public notification for general information. It is not professional advice and does not cover every condition or exception, and the rule can change again by a later notification. Read the notification itself before acting on it, or consult a qualified professional on your own facts.