Jigar M. Patel
International Tax Attorney
With the Migration of the Old Income-tax Act of 1961 to the new law of the Income-tax Act, 2025, nearly 2 Crore Annual Filers of the erstwhile Form 15G & 15H have been eager to know and understand the new provisions in relation to enjoying NIL TDS. Effective 1st April, 2026, the provisions of Section 393(6) of the new Income-tax Act, 2025 and relevant Income-tax Rules, 2026 have introduced Form 121, a single consolidated declaration form, replacing the erstwhile Forms 15G and 15H.
What is Form 121?
Form 121 is a self-declaration furnished by an eligible person to the payer of specified income payments, declaring that no tax is payable on his estimated total income for the year. Based on this declaration, the payer is required not to deduct tax at source (TDS) from the specified income payments, as under:
- Withdrawal from Recognized Provident Fund
- Insurance Commission
- Rent
- Income from Units of Mutual Fund
- Interest on Securities
- Interest on deposits with Bank, Post-Office, Financial Institutions, Private Parties
- Amount receivable (including bonus) under a Life Insurance Policy
- Dividend Income
Eligibility Criteria for Declaration
The entitlement to the relief for ‘No TDS’ via submission of Declaration in Form 121 is intrinsically linked to the prescribed total income thresholds. Resident Senior Citizens have been granted the special privilege to enjoy the benefit of ‘Zero TDS,’ if their total income does not exceed Rs.12 lakhs. This is keeping in view the fact that the effective tax liability post tax rebate would work out to Nil. In case of Pensioners, this threshold will stand raised to Rs.12.75 lakhs, keeping in view the added allowability of standard deduction of Rs.75,000.
However, in case of non-senior citizens, as well as entities like HUFs, AOPs / BOIs and Charitable Trusts (treated as AOPs), the benefit of ‘No TDS’ shall be allowed subject to the condition that the total income of the declarant does not exceed the basic exemption limit being Rs.4 lakhs under the new tax regime and Rs.2.5 lakhs under the old regime. The chart below provides a concise overview of the eligibility criteria for different persons:
Effective 1st April, 2026
Form 121 – Replacing Old Forms 15H / 15G
| Status of Declarant | Eligibility Criteria & Total Income (TI) Limit |
| Resident Senior Citizen | Where Tax Payable is NIL Hence, Declaration can be made after considering the benefit of Rebate, if TI is: · Rs. 12 Lakhs, in case of No Pension · Rs. 12.75 Lakhs, Including Pension |
| Note: If on the date of Declaration, TI includes LTCG/STCG chargeable at special rate, since the benefit of Rebate is not available in respect of the tax on such income, Form 121 can be filed only on the basis of the TI criteria, as mentioned hereunder, in case of a Resident Individual. | |
| Resident Individual (Non-Senior Citizen) or HUF or BOI / AOP (including Charitable Trust)
|
(being the prescribed Basic Exemption Limits in respective cases) |
| Non-Resident, including NRI | Not Eligible to File Form 121 |
Practical Considerations for Taxpayers
While Form 121 simplifies the procedural aspect, taxpayers must remain cautious from a compliance standpoint. Any incorrect or false declaration may attract consequences of penalty or prosecution under the Income-tax Act. Equally important is the timely submission of the form since delayed filing may result in TDS being deducted, leading to avoidable cash flow constraints.
