A new development in the taxation landscape has streamlined the process for individuals seeking to avoid Tax Deducted at Source (TDS). Effective from April 1, Form 121 has replaced the previous requirement of submitting either Form 15G or 15H, marking a significant shift in how taxpayers manage TDS declarations.
Previously, individuals below 60 years utilized Form 15G, while senior citizens used Form 15H to prevent TDS deduction if their income fell below the taxable threshold. With the onset of the new financial year, this distinction has been eliminated. Both categories of individuals are now required to use Form 121, simplifying the procedure and ensuring uniformity.
Form 121 serves as a self-declaration enabling individuals to request exemption from TDS on specific types of income, such as interest from bank deposits or post office schemes. The core objective remains unchanged – individuals with income below the taxable limit can submit this form to avoid TDS deduction. However, the format and legal framework have been updated under the new tax laws.
Under the prior regulations, Forms 15G and 15H were governed by Section 197A of the Income-tax Act, 1961, and Rule 29C. In contrast, the new Income-tax Act, 2025, introduces Form 121 under Section 393(6) and Rule 211 of the Income-tax Rules, 2026. This transition aims to simplify and modernize tax processes while maintaining the original purpose of the form.
Form 121 is applicable to resident individuals, irrespective of age, and Hindu Undivided Families meeting the specified criteria. However, companies, firms, and non-residents are ineligible to utilize this form. The key requirement remains unchanged – the estimated total income for the year must be below the taxable threshold.
When submitting Form 121, individuals need to provide personal details, income type, estimated amount, total expected income for the year, and previous income tax return details. The second part of the form is completed by the income payer, documenting relevant information.
Necessary documents for Form 121 submission include PAN, income or investment details for TDS exemption, proof of age in some instances, and bank account information for interest income declarations. This change is part of the broader tax simplification efforts under the new Income-tax Act, 2025, aiming to enhance compliance, particularly for individuals unfamiliar with tax regulations.
While seemingly minor, the introduction of Form 121 eliminates confusion and offers a more straightforward approach to managing TDS obligations for taxpayers.