Form 121 (Earlier 15G and 15H): Stopping TDS When Tax Is Nil
- Who can file
- The two tests, precisely
- What the form asks for
- Worked examples
- Practical points
- Year labels
- Where this fits
From tax year 2026-27, a single form, Form No. 121, replaces Forms 15G and 15H. You give it to a bank, company or other payer to stop TDS on interest, dividends and certain other income when the tax on your estimated total income for the year will be nil. It is filed under section 393(6) of the Income-tax Act, 2025 and rule 211 of the Income-tax Rules, 2026.
Resident individuals aged 60 or more need only meet the nil-tax condition. Younger individuals must also show that the income covered by their declarations does not exceed the maximum amount not chargeable to tax. A false declaration can lead to penalty or prosecution.
Who can file
| Person (section 393(6) Table) | Income the declaration can cover | Conditions |
|---|---|---|
| Sl. No. 1: resident individual | Provident fund accumulated balance paid under section 392(7); insurance commission; rent from a specified person; mutual fund unit income; interest (securities, bank, post office and other); life insurance payouts; dividends | Tax on estimated total income is nil. If under 60, the income declared also must not exceed the maximum amount not chargeable to tax |
| Sl. No. 2: any other person except a company or firm (for example an HUF or trust) | The same list, except dividends | Nil tax, and the income-limit condition |
A company or firm cannot use Form No. 121.
The two tests, precisely
The declaration in Part A of Form No. 121 has you confirm two things:
- The nil-tax test: tax on your estimated total income for the tax year, including the income in this and earlier declarations, will be nil. Because tax is computed after the section 156 rebate, a resident individual under the new regime with total income up to ₹12 lakh, all taxed at slab rates, meets this test.
- The income-limit test (not for those aged 60 or more at any time in the tax year): the aggregate income for which you have filed Form No. 121 in the year does not exceed the maximum amount not chargeable to tax. Under the new regime the nil band runs to ₹4,00,000.
The second test is why the form asks for the number of earlier Form No. 121 declarations filed in the year and the total income they covered.
What the form asks for
- Name, PAN, status and residential status, and whether you are 60 or older at any time during the tax year;
- the tax year, the nature of the income and the estimated amount;
- details of other Form No. 121 declarations in the year;
- your estimated total income for the year;
- return acknowledgement numbers and returned income for the previous two tax years.
Part B is completed by the payer. Under rule 211, the payer allots a unique identification number to each declaration and reports it in its quarterly TDS statement, even if no tax was deducted. The declaration can be filed electronically or on paper, and the tax department can call for it for up to seven years.
Worked examples
1. A pensioner’s FD interest. Mr Rao, 67, receives pension of ₹6,00,000 and FD interest of ₹1,80,000 from one bank in tax year 2026-27. He is on the new regime.
- Total income is ₹7,05,000: pension less the ₹75,000 standard deduction, plus interest.
- Slab tax is ₹15,250, which the section 156 rebate reduces to nil.
- The interest exceeds the ₹1,00,000 senior citizen threshold, so without a declaration the bank would deduct 10%, ₹18,000.
- Because he is over 60, only the nil-tax test applies. He files Form No. 121 with the bank at the start of the year and nothing is deducted.
2. A student with dividends and interest. Neel, 22, has no other income. He expects ₹1,20,000 of FD interest and ₹30,000 of cash dividends in the year.
- His tax will be nil.
- The total covered by his declarations, ₹1,50,000, is well below the ₹4,00,000 nil band under the new regime, so both tests are met.
- He files one Form No. 121 with the bank and one with the company, disclosing the first in the second.
3. When the form cannot be used. Meena, 50, has no salary and lives on FD interest of ₹5,00,000 a year.
- Under the new regime her tax is nil after the rebate, so she passes the nil-tax test.
- But she is under 60, and the ₹5,00,000 of interest she would declare exceeds the ₹4,00,000 nil band.
- She fails the income-limit test and cannot file Form No. 121. The bank deducts TDS, and she claims a refund in her return or applies for a lower deduction certificate under section 395.
Illustrative figures.
Practical points
- File early in the year. A declaration stops future deductions. It does not reverse TDS already deducted; that comes back through your return.
- One per payer, per year. File afresh each tax year with each bank or company.
- Do not use it if tax is not nil. Capital gains, rental income or a job change can push tax above nil mid-year. If your estimate changes, stop relying on the declaration.
- Dividends on listed shares from April 2027. From 1 April 2027 the Finance Act, 2026 allows the declaration to be given electronically to a depository for dividends, interest on securities and mutual fund units held in demat form and listed on a stock exchange (new section 393(6)(b)).
- Payer’s reporting. From tax year 2026-27, payers deliver copies of declarations to the tax department by the seventh day of the month after each quarter (section 393(7), as substituted).
Year labels
Form No. 121 applies to income of tax year 2026-27 onwards. Declarations for FY 2025-26 were made in Forms 15G and 15H under section 197A of the Income-tax Act, 1961.
Where this fits
- Which payments attract TDS: TDS rates and thresholds for 2026-27
- An FD interest case: TDS on ₹60,000 of FD interest
- The ₹12 lakh rebate: new regime slabs for tax year 2026-27
- Getting a refund of TDS: fixing a TDS mismatch
Sources. Income-tax Act, 2025, sections 156, 202, 392(7) and 393(1), (6) and (7), Gazette of India, 21 August 2025. Finance Act, 2026, section 84, Gazette of India, 30 March 2026. Income-tax Rules, 2026, rule 211 and Form No. 121, notified 20 March 2026.