What is Form 121 and why was it introduced?

Form 121 is a consolidated tax declaration form introduced by the Income Tax Department to replace Form 15G and Form 15H. It allows individuals whose total income is below the taxable limit to declare that no TDS should be deducted on their interest income from banks, post offices, and other financial institutions.

Who is eligible to submit Form 121 in FY 2026-27?

Resident individuals below 60 years with total income below the basic exemption limit, and senior citizens (60 years and above) with income below their applicable exemption limit are eligible. For FY 2026-27, the basic exemption limit is Rs. 3 lakh for individuals below 60 years and Rs. 5 lakh for senior citizens under the new tax regime.

Can NRIs submit Form 121 to avoid TDS?

No, Form 121 is only available to resident Indians. Non-Resident Indians (NRIs) cannot submit Form 121 to avoid TDS deductions on their interest income.

How many times can I submit Form 121 in a financial year?

You need to submit Form 121 separately to each bank or financial institution where you hold deposits. You can submit it once per financial year to each institution, but if your circumstances change or you open new accounts, you may need to submit fresh declarations.

What happens if I submit Form 121 but my income exceeds the exemption limit?

If you submit Form 121 but your total income exceeds the basic exemption limit, you will be liable to pay tax on the entire income along with interest under Section 234A, 234B, and 234C. You may also face penalties for furnishing incorrect information in the declaration form.

Form 121 Replaces Form 15G and 15H: Complete Guide FY 2026-27

The Income Tax Department has streamlined the process of claiming TDS exemption on interest income by introducing Form 121, which consolidates and replaces the earlier Form 15G and Form 15H. This significant change came into effect from Financial Year 2026-27 (Assessment Year 2027-28), making it easier for taxpayers to submit a single unified declaration to banks and financial institutions.

If you're someone whose total income falls below the basic exemption limit and you want to avoid TDS deductions on interest earned from fixed deposits, savings accounts, or recurring deposits, understanding Form 121 is crucial. This comprehensive guide will walk you through everything you need to know about Form 121, including eligibility criteria, the download process, and step-by-step submission instructions.

What is Form 121?

Form 121 is a self-declaration form that allows resident individuals to declare that their estimated total income for the financial year will be below the basic exemption limit, and therefore, no tax is payable. By submitting this form to banks, post offices, and other financial institutions, eligible individuals can ensure that no Tax Deducted at Source (TDS) is deducted on their interest income.

This form is governed by Section 197A of the Income Tax Act, 1961, which provides provisions for individuals to receive interest income without TDS deduction when their total income is below the taxable threshold.

Why Was Form 121 Introduced?

Previously, taxpayers had to use two different forms:

Form 15G – For individuals below 60 years of age
Form 15H – For senior citizens aged 60 years and above

The introduction of Form 121 as a unified replacement simplifies the process, reduces confusion, and makes compliance easier for both taxpayers and financial institutions. The consolidated format also aligns with the government's digital India initiative and reduces paperwork.

Eligibility Criteria for Form 121 in FY 2026-27

To submit Form 121 and claim exemption from TDS on interest income, you must meet the following eligibility conditions:

1. Residential Status

You must be a resident individual in India. Non-Resident Indians (NRIs) are not eligible to submit Form 121.

2. Income Limit

Your total estimated income for FY 2026-27 must be below the basic exemption limit applicable to your age category:

Individuals below 60 years: Total income should not exceed Rs. 3,00,000 (under new tax regime as per Budget 2026)
Senior Citizens (60-80 years): Total income should not exceed Rs. 5,00,000 (under new tax regime)
Super Senior Citizens (above 80 years): Total income should not exceed Rs. 5,00,000 (under new tax regime)

Note: If you're opting for the old tax regime, different exemption limits and deductions may apply. Consult with a tax professional to determine your exact eligibility.

3. Tax Liability

After claiming all eligible deductions and exemptions, your total tax liability for the year should be nil.

4. PAN Requirement

You must have a valid Permanent Account Number (PAN) to submit Form 121. The form requires PAN details for processing.

Who Cannot Submit Form 121?

Non-Resident Indians (NRIs)
Hindu Undivided Families (HUFs)
Companies, firms, or other business entities
Individuals whose total income exceeds the basic exemption limit
Persons who have tax liability after deductions

How to Download Form 121

Form 121 is available for download from multiple sources:

Method 1: Income Tax Department Website

Visit the official Income Tax Department website at www.incometax.gov.in
Navigate to 'Forms/Downloads' section
Search for 'Form 121' in the forms list
Click on the PDF link to download the form
Save the form to your device

Method 2: Bank Websites

Most banks provide Form 121 on their official websites under the 'Forms' or 'Downloads' section. You can visit your bank's website and download the form directly.

Method 3: Bank Branch

You can also obtain a physical copy of Form 121 by visiting your nearest bank branch. The bank staff will provide you with the form and assist you with the submission process.

How to Fill Form 121: Step-by-Step Guide

Form 121 requires accurate information. Here's a detailed guide on filling each section:

Part I - Personal Information

Name: Enter your full name as per PAN card
PAN: Provide your 10-digit PAN number
Address: Fill in your complete residential address
Email and Mobile: Provide valid contact details
Aadhaar Number: Enter your 12-digit Aadhaar number (mandatory for linking)
Age Category: Indicate whether you're below 60, between 60-80, or above 80 years
Assessment Year: For FY 2026-27, write AY 2027-28

Part II - Income Details

Estimated Total Income: Mention your estimated total income from all sources for FY 2026-27
Agricultural Income: If applicable, specify agricultural income (which is exempt but considered for rate purposes)
Interest Income Expected: Estimate the total interest income from all sources

Part III - Declaration

Confirm that the information provided is true and correct
Declare that your total income will not exceed the basic exemption limit
State that no tax is payable on your estimated income

Part IV - Bank/Institution Details

Name of Bank/Institution: Enter the name of the bank or financial institution
Account Number: Provide your account number
Branch Address: Mention the branch details

Part V - Signature and Date

Sign the form in the designated space
Enter the date of submission
Ensure the signature matches your bank records

Documents Required for Form 121 Submission

While submitting Form 121, you may need to provide the following documents:

Self-attested copy of PAN Card
Self-attested copy of Aadhaar Card
Address proof (if not already available with the bank)
Age proof for senior citizens (if not in bank records)
Recent passport-size photograph (if required by the institution)

Note: Requirements may vary by institution. Check with your bank for specific documentation needs.

How to Submit Form 121

Once you've filled Form 121 completely, you can submit it through the following methods:

1. Physical Submission

Visit your bank branch and submit the duly filled and signed Form 121 along with required documents to the bank official. Request an acknowledgment receipt for your records.

2. Online Submission

Many banks now offer online submission of Form 121 through their net banking portals:

Log in to your net banking account
Navigate to 'Tax Forms' or 'TDS Forms' section
Select Form 121
Fill in the details online
Upload scanned copies of required documents
Submit electronically and download the acknowledgment

3. Email Submission

Some banks accept Form 121 via email. Scan the filled and signed form along with documents and email to the designated email address provided by your bank.

Important Points to Remember

Validity Period

Form 121 is valid for one financial year only. You need to submit a fresh form at the beginning of each financial year (preferably in April) to ensure no TDS is deducted throughout the year.

Multiple Submissions

If you have accounts with multiple banks or financial institutions, you need to submit Form 121 to each institution separately.

Mid-Year Changes

If your income circumstances change during the year and your total income exceeds the exemption limit, you must inform the bank immediately and allow them to deduct TDS on subsequent interest payments.

Penalties for False Declaration

Furnishing incorrect information in Form 121 can lead to:

Prosecution under Section 277 of the Income Tax Act
Penalty under Section 271H (up to Rs. 10,000)
Interest liability on unpaid tax
Tax demand with interest under Sections 234A, 234B, and 234C

Advantages of Form 121

Simplified Process: Single form replaces two separate forms
Immediate Benefit: Receive full interest income without TDS deduction
No Refund Hassle: Avoid the lengthy process of claiming TDS refunds
Better Cash Flow: Access to complete interest amount improves liquidity
Reduced Compliance: Less paperwork and easier tracking
Digital Integration: Easier to submit online through banking platforms

Common Mistakes to Avoid

Incorrect PAN Details: Ensure PAN is accurately mentioned and matches your PAN card
Overestimating Exemption Eligibility: Carefully calculate total income including all sources
Missing Signatures: Form must be properly signed to be valid
Late Submission: Submit Form 121 before the first interest credit of the financial year
Not Updating Banks: If income increases mid-year, inform the bank promptly
Forgetting Multiple Banks: Submit to all institutions where you hold deposits

What to Do If TDS Was Already Deducted?

If TDS has been deducted before you submitted Form 121, you have two options:

Claim Refund: File your Income Tax Return (ITR) for AY 2027-28 and claim the TDS amount as a refund. The refund will be processed after assessment.
Carry Forward: Adjust the TDS amount against any future tax liability if applicable.

To claim refund, ensure you have:

Form 26AS or Annual Information Statement (AIS) showing TDS details
Interest certificates from banks
Accurate reporting in your ITR

Conclusion

Form 121 represents a welcome simplification in India's tax compliance framework for FY 2026-27. By consolidating Form 15G and Form 15H into a single, unified declaration, the Income Tax Department has made it easier for millions of individuals, especially senior citizens and low-income taxpayers, to receive their full interest income without TDS deductions.

If your total income falls below the basic exemption limit of Rs. 3 lakh (or Rs. 5 lakh for senior citizens), make sure to download, fill, and submit Form 121 to all your banks and financial institutions at the earliest. This simple step can save you from the hassle of claiming refunds later and ensure better cash flow throughout the year.

Remember to submit Form 121 at the beginning of each financial year and keep track of your total income to ensure you remain eligible. Stay compliant, stay informed, and make the most of the provisions available under the Income Tax Act to optimize your tax liability legally.

Disclaimer: This article is for informational purposes only. Tax laws and provisions are subject to change. Please consult a qualified Chartered Accountant or tax professional for advice specific to your situation.