Form 121 replaces Forms 15G and 15H: the new self-declaration for nil TDS on interest under the 2025 Act

From a tax year beginning on or after 1 April 2026, a resident who wants a bank or post office to pay interest without deducting tax at source can no longer hand over Form 15G or Form 15H. Both forms have been replaced by a single self-declaration, Form 121, under section 393(6) of the Income-tax Act, 2025. The Income Tax e-Filing portal now lists Form 121 alongside the old forms, which remain relevant only for years governed by section 197A of the Income-tax Act, 1961.

This guide covers what the provision says, a worked example built on the FY 2025-26 slab figures Oquilia tracks, the mistakes that most often lead to mismatches in Form 26AS and the Annual Information Statement, and seven questions readers ask us every April.

What the Section Says

Under the 1961 Act, section 197A allowed an eligible person to give the payer a written declaration that their income was below the taxable limit, so that tax was not deducted on interest and certain other income. Two forms served that purpose, split by age:

Source: Form 15G/15H/Form 121 page, Income Tax e-Filing portal.

The core idea has not changed in the move from section 197A to section 393(6): the declaration is made to the payer, not filed with the department as a return, and it tells the payer that the declarant's estimated income for the year is below the level at which tax is charged. What has changed is the paperwork: two age-based forms are now one form, and the reference point is the 2025 Act, which governs tax years from 1 April 2026.

Why the declaration matters: the section 194A thresholds

A declaration is only needed when interest from one payer would otherwise cross the TDS threshold. Under section 194A of the 1961 Act, as amended by Budget 2025, the thresholds are:

If the interest a single bank pays you in a year stays under Rs 50,000 (or Rs 1 lakh for a senior), the bank should not deduct tax in the first place and no declaration is needed for that account. The declaration earns its keep when one deposit, or a cluster of deposits at the same bank, pushes interest over that line while your total income for the year stays below the taxable limit. You can estimate the deduction a payer would otherwise make with the TDS calculator, and read the basics in our glossary entry on TDS.

What "below the taxable limit" means in rupees

The taxable limit is the level of income on which no tax is charged at all, which is the nil-rate band of the slab table. For FY 2025-26 the figures in Oquilia's rate configuration are:

The two columns answer different questions. A tax rebate under section 87A reduces the tax payable after it has been computed; it does not raise the level of income that is not chargeable to tax. Someone with Rs 9 lakh of income in the new regime may owe nothing after the Rs 60,000 rebate, but their income is still above the Rs 4 lakh nil-rate band. That distinction is where many declarations go wrong, and the worked example below shows why.

Worked Example

Take a 45-year-old resident homemaker with no salary or business income. Her only income in the tax year is interest from fixed deposits at two banks and a savings account. She has not opted into the old regime, so the new-regime slabs apply.

Step 1: check whether TDS would apply. Bank A pays Rs 2,10,000 of interest, which is above the Rs 50,000 threshold for a non-senior under section 194A, so Bank A would deduct tax unless it holds a valid declaration. Bank B's FD interest of Rs 1,50,000 is also above Rs 50,000.

Step 2: check whether her income is below the taxable limit. Her estimated total income of Rs 3,80,000 is below the new-regime nil-rate band of Rs 4,00,000. On these figures, her tax for the year is nil before any rebate is considered, and a self-declaration is appropriate.

Step 3: file with each payer. She gives Form 121 to Bank A and to Bank B at the start of the tax year, before the first interest credit. A declaration given to one bank does nothing for deposits at another; each payer needs its own.

Now change one number. Suppose a new Rs 5 lakh deposit at Bank A lifts her total income to Rs 4,30,000. She is now Rs 30,000 above the Rs 4,00,000 nil-rate band. Her new-regime tax would be 5% of Rs 30,000, or Rs 1,500, which the section 87A rebate (up to Rs 60,000 on income up to Rs 12 lakh) wipes out entirely. Her final tax is still nil, but her income is no longer below the taxable limit, so she should not give a declaration on the footing that it is. The safer course is to let the banks deduct and claim the deducted amount as a refund in her return, which she can model with the income-tax calculator.

The old-regime comparison. Under the old regime, the same Rs 3,80,000 is above the Rs 2,50,000 nil-rate band. Tax would be 5% of Rs 1,30,000, or Rs 6,500, which the old-regime 87A rebate of up to Rs 12,500 (taxable income up to Rs 5 lakh) brings to nil. Section 80TTA, a deduction for savings interest available to non-seniors, applies only under the old regime. The point is that the regime you pick changes whether you clear the taxable limit, so run both through the old vs new regime comparison before you sign anything.

Common Mistakes

These are the errors that most often show up as mismatches between the TDS a payer reports and the income a taxpayer declares in the return, visible in Form 26AS and the AIS.

1. Handing over Form 15G or 15H after 1 April 2026. For a tax year beginning on or after 1 April 2026, the declaration must be in Form 121 under section 393(6) of the 2025 Act. A Form 15G or 15H dated in tax year 2026-27 refers to section 197A of an Act that no longer governs that year.

2. Counting only one bank's interest. The declaration speaks to your estimated total income for the year, not to the Rs 2,10,000 one bank pays you. In the example above, adding Bank B's Rs 1,70,000 is what decides eligibility.

3. Reading the Rs 12 lakh rebate ceiling as the taxable limit. Nil tax after the Rs 60,000 section 87A rebate is not the same as income below the Rs 4 lakh nil-rate band. A declaration made on the wrong footing is a false declaration, even if no tax is ultimately due.

4. Assuming income under the TDS threshold is tax-free. The Rs 50,000 and Rs 1 lakh figures in section 194A decide whether the payer deducts tax; they say nothing about whether the interest is taxable in your hands. Interest below the threshold is still income and must be reported in the return.

5. Filing late in the year. A declaration operates on payments made after the payer receives it. If you give it in November, interest credited between April and October may already have suffered TDS, which you can then recover only through the return.

6. Filing when you are not eligible. Under the 1961 Act, companies and firms could not use Form 15G, and both forms were for residents. A non-resident should not use a resident's declaration; the TDS rules for NRIs run on separate provisions.

7. Claiming 80TTA or 80TTB in the new regime. Both deductions on interest income are available only under the old regime. Section 80TTB is for seniors aged 60 years or more. Factoring either deduction into a new-regime estimate understates income.

FAQ

What is Form 121?

Form 121 is the self-declaration under section 393(6) of the Income-tax Act, 2025, given to a payer such as a bank or post office so that tax is not deducted at source on interest and certain other income. It applies for tax years beginning on or after 1 April 2026.

Are Forms 15G and 15H still valid?

Forms 15G and 15H were made under section 197A of the Income-tax Act, 1961. For a tax year beginning on or after 1 April 2026, the declaration must be furnished in Form 121, which replaces both, according to the Income Tax e-Filing portal.

I am 68. Do I still need a separate senior citizen form?

No. Under the 1961 Act a resident aged 60 years or more used Form 15H and a younger resident used Form 15G. From 1 April 2026 both are replaced by the single Form 121, so age no longer decides which form you use.

Do I need to submit Form 121 if my interest is below Rs 50,000?

If interest from a particular payer in the year stays below the section 194A threshold of Rs 50,000 (Rs 1 lakh for a senior citizen), that payer should not deduct tax, so a declaration is not needed for that account. The interest is still taxable income and must be reported.

Can I give Form 121 if my tax is nil only because of the 87A rebate?

The declaration rests on income being below the taxable limit. A section 87A rebate of up to Rs 60,000 in the new regime reduces tax, but it does not change the Rs 4 lakh nil-rate band for FY 2025-26. If your income is above that band, let tax be deducted and claim a refund in your return.

Do I file Form 121 with the Income Tax Department?

No. The declaration is given to the payer, such as a bank or post office, which then does not deduct tax at source. Give a separate declaration to each payer, ideally at the start of the tax year before the first interest credit.

Can an NRI use Form 121?

Forms 15G and 15H were declarations for residents, and the Income Tax e-Filing portal describes Form 121 as the replacement for those two forms. A non-resident's interest is subject to separate TDS provisions, so an NRI should not rely on this declaration.

Sources

• Income Tax Department, Form 15G/15H/Form 121 page, Income Tax e-Filing portal.
• Government of India, India Code, for the text of the Income-tax Act, 1961 (section 197A) and the Income-tax Act, 2025 (section 393(6)).