ITR Filling: Big change in TDS Rules; Every Tax payer Must Know This
Form 121 replaces the existing Forms 15G and 15H under the Income Tax Act, 2025, bringing both declarations into a single, simplified format.
Taxpayers who earn income such as bank interest, rent, insurance commission, dividends, or income from securities are generally subject to Tax Deducted at Source (TDS). ITR Filling: Big change in TDS Rules; Every Tax payer Must Know This.
However, if their estimated tax liability for the financial year is nil, they can now submit the newly introduced Form 121 to prevent TDS from being deducted at source. Form 121 replaces the existing Forms 15G and 15H under the Income Tax Act, 2025, bringing both declarations into a single, simplified format.
The form serves as a declaration to the payer that the taxpayer’s estimated total income will not result in any tax liability. This helps taxpayers avoid unnecessary TDS deductions and eliminates the need to claim a refund later.
Individuals below the age of 60, as well as eligible taxpayers such as Hindu Undivided Families (HUFs) and certain trusts, can submit Form 121 if their estimated tax liability is zero and the specified income subject to TDS does not exceed the prescribed exemption limit.
For senior citizens aged 60 years or above, the primary eligibility condition is that their estimated tax liability for the financial year must be nil, irrespective of the amount of eligible income.
While submitting Form 121, taxpayers must provide a valid and active Permanent Account Number (PAN), details of their estimated income and investments, proof of age (where applicable), and the Tax Deduction and Collection Account Number (TAN) of the payer.
The declaration can be used for various types of income, including interest earned from banks and post offices, rental income, insurance commission, dividends, and income from mutual funds, among others.
Taxpayers are advised to submit the form well before the income is credited or paid, either online or in physical form, to ensure that TDS is not deducted. After verifying the declaration, the payer is required to assign a Unique Identification Number (UIN) and report it through the Income Tax Department’s e-filing portal.
