Previously, individual taxpayers in India relied on Forms 15G and 15H to avoid Tax Deducted at Source (TDS) on interest income, but these forms had an age restriction of 60 years. With the introduction of Form 121 on April 1, 2026, this expectation has been turned on its head.
Form 121 replaces both Forms 15G and 15H, allowing all individual taxpayers, regardless of age, to request no TDS on certain types of income if their total income falls below the taxable limit. This change is governed by Section 393(6) of the Income-tax Act, 2025, marking a significant shift in tax compliance.
The decisive moment came with the announcement of Form 121, which aims to simplify the tax system in India. Unlike its predecessors, Form 121 is a self-declaration form that requires the PAN of the individual submitting it and must be submitted before interest is credited to avoid TDS.
Hindu Undivided Families (HUFs) can also file Form 121 if they meet the necessary conditions, while companies and firms are excluded from using this form. This broadens the scope of who can benefit from simplified tax declarations.
Experts suggest that the introduction of Form 121 is a step towards reducing complexity in tax compliance, making it easier for taxpayers to navigate their obligations. The previous Forms 15G and 15H were governed by Section 197A of the Income-tax Act, 1961, which now feels outdated in comparison.
As the Indian economy continues to evolve, the shift to Form 121 reflects a broader effort to modernize tax procedures. This change not only streamlines the process for individual taxpayers but also aligns with global trends in tax administration.
With Form 121, the Indian government aims to enhance compliance rates and reduce the burden on taxpayers. The move is expected to have a positive impact on the overall tax landscape in the country.
In summary, Form 121 represents a significant advancement in India’s tax system, replacing outdated forms and making it easier for individuals to manage their tax declarations.
Details remain unconfirmed regarding the long-term effects of this change, but the initial response from taxpayers has been cautiously optimistic.
