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Quoting of PAN is mandatory for submitting the declaration in Part A of Form No. 121 by the declarant.
Form 121 is a declaration by a taxpayer to the effect that tax on his estimated total income for the tax year will be Nil, with a view to avoiding the deduction of tax at source.
If your income falls below the total taxable limit and you are not liable for any tax liability, you can avoid the tax deduction at source (TDS) on your income earned during the tax year. For this, individuals were required to furnish Form 15G or Form 15H to avoid the deduction of TDS. Under the new Income Tax Act 2025, Forms 15G and 15H have been combined into a single consolidated Form No. 121 to streamline reporting and reduce administrative complexity.
Here are ten key things to know about the Form 121.
1. The previous Forms 15G and 15H have been replaced by Form 121, which must be completed by residents indicating to the tax authorities that their expected tax liability is Nil.
2. Form 121 is a declaration by a taxpayer to the effect that tax on his estimated total income for the tax year will be Nil, with a view to avoiding the deduction of tax at source. It is required to be submitted to the concerned payer. Based on such a declaration, the payer will not deduct tax on income or credit due to the taxpayer.
3. The types of income covered for Form No. 121 include: PF withdrawals and Pension, Insurance Commission, Rent, Interest on deposits, Income from Mutual Funds, Payments in respect of Life Insurance Policy, Dividend etc. The declarant must furnish the declaration in Form No. 121 to the payer before the scheduled transaction date.
4. Form No. 121 is a self-declaration form furnished by individuals to ensure no deduction of tax at source (TDS) on specified incomes such as interest on bank deposits, post office deposits, or other specified incomes, when their total income is below the taxable limit.
5. The new Form No. 121 has replaced the earlier Forms 15G & 15H. Now, both types of taxpayers i.e. taxpayers below the age of 60 as well as taxpayers of the age of 60 and above, will use Form No. 121 for submitting a declaration in order to avoid relevant income from being subjected to TDS. Non-residents are not eligible to file this form.
6. Filing Form 121 is optional for taxpayers wishing to avoid tax deduction at source. It is meant to be used only by those taxpayers who do not want tax to be deducted at source, subject to meeting certain conditions, as their tax on estimated total income for the Tax Year is likely to be Nil. A declaration in Form No. 121 needs to be filed for every Tax Year separately, as required.
7. Quoting of PAN is a mandatory requirement for submission of the declaration in Part A of Form No. 121 by the declarant. In the absence of PAN, the declaration is invalid and the payor is required to deduct TDS at the applicable rate as per the Income-tax Act, 2025. Part A of Form 121 must be filled out and signed by the declarant, while Part B is to be completed by the payer’s office.
8. Submission of a declaration by the declarant to the payer can be made in paper form, or online if any such facility is provided by the payer i.e the regional office.
9. A Unique Identification Number (UIN) is assigned to every Form 121 received, which includes a sequence number, the tax year, and the TAN of the payer. Additionally, a consolidated statement of all Forms 121 received during the month must be uploaded by the 7th of the following month via the IT Department’s e-filing Portal, and the UINs must be referenced in the Quarterly TDS Return in Form No. 140.
10. The physically signed forms of Form No. 121 uploaded by declarant members can be utilized for preparing the consolidated statement for monthly uploads in the IT Department’s e-filing portal and in the Quarterly TDS Return.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws and regimes are subject to frequent changes by the government. Readers should verify details with official Income Tax Department notifications or consult a Chartered Accountant before making any financial decisions. Financial Express is not responsible for any decisions made based on this information.
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