CBDT Mandates Unique Identification Number (UIN) for Form 121 No-TDS Declarations

(INDIA) — The Central Board of Direct Taxes issued Notification No. 01/2026 on March 30, 2026, introducing a mandatory Unique Identification Number (UIN) system for no-TDS declarations under Form 121 from April 1, 2026.

The move requires payers such as banks and companies to assign a 26-character code to each declaration made under Section 393(6) of the Income-tax Act, 2025. CBDT also requires quarterly filing of Part B of Form 121 on the e-filing portal, even if no tax was deducted.

Form 121 replaces Forms 15G and 15H. Declarants must quote their PAN, or Permanent Account Number, for identity verification across digital tax records.

The new framework arrives as U.S. immigration and tax authorities tighten coordination on taxpayer information. In April 2025, Secretary of Homeland Security Kristi Noem and Treasury Secretary Scott Bessent signed an agreement allowing the IRS to share certain taxpayer data, including names and addresses, with Immigration and Customs Enforcement.

That program won a court boost on February 24, 2026, when the D.C. Circuit Court of Appeals allowed the data-sharing arrangement to proceed. The decision cleared the way for U.S. authorities to continue cross-checking tax information with immigration enforcement records.

Noem welcomed the ruling in a statement dated February 24, 2026. “We have saved taxpayers more than $13.2 billion here at DHS by streamlining enforcement. Our collaboration with the Treasury ensures that those who benefit from our system are following the law, including their tax obligations.”

U.S. Citizenship and Immigration Services had already signaled a harder line. USCIS Director Joseph Edlow said on December 22, 2025, “USCIS is exercising new law enforcement authorities. [we have] declared war on immigration fraud. We are pursuing those who exploit, abuse, and undermine the integrity of the immigration system, including through financial misrepresentation.”

Taken together, the Indian tax change and the U.S. enforcement shift matter most for non-resident Indians and foreign nationals with financial links to India. A no-TDS declaration that once functioned mainly as a domestic tax compliance form now sits in a more traceable cross-border environment.

How the New Form 121 System Works

Under the CBDT rules, the UIN attached to each Form 121 declaration will include a sequence number, the tax year, and the payer’s TAN, or Tax Deduction and Collection Account Number. That structure gives each no-TDS declaration a distinct digital marker.

Quarterly reporting expands the audit trail. Because payers must file Part B of Form 121 every quarter even when no tax has been deducted, the system captures both the declaration itself and the reporting cycle tied to it.

PAN quoting adds another layer. Since the declaration links to a taxpayer’s PAN, the form connects identity verification to a standardized digital record inside India’s tax system.

Those domestic changes carry wider weight because India and the United States already exchange certain financial information under the FATCA and IGA Model 1 framework. In that arrangement, CBDT shares financial account data with the IRS.

The new UIN system does not replace that exchange structure. Instead, it adds another digital identifier to a category of declarations that can affect how income is treated at source in India.

For Indian citizens on H-1B or L-1 visas, that can create a sharper compliance test across two jurisdictions. A taxpayer who uses Form 121 to avoid TDS on Indian interest income may now face closer alignment demands between Indian declarations and U.S. tax filings, including Form 8938 for foreign assets.

USCIS added to that pressure in January 2026, when it updated its Policy Manual to raise the bar on Good Moral Character in cases involving foreign income reporting. Under that approach, inaccurate reporting of foreign income or incorrect tax declarations abroad can affect naturalization and green card applications.

The intersection of those rules means tax paperwork filed in one country may carry immigration consequences in another. For visa holders and immigrants whose finances span borders, the record created by a UIN can become part of a wider digital chain.

Compliance Burden for Payers and Account Holders

Indian tax professionals and account holders are likely to focus first on the immediate compliance changes. From April 1, 2026, every qualifying no-TDS declaration under Form 121 will require a UIN, and the payer — not the declarant — must generate and allot it.

That shifts a large share of the operational burden to banks, companies and other deductors. They must build or update systems that can generate the 26-character number in the prescribed format, attach it to each declaration, and carry the information into quarterly submissions.

The TDS Centralized Processing Cell published an update on the UIN format dated March 28, 2026, on tdscpc.gov.in. CBDT’s broader notification appears on incometaxindia.gov.in.

For individuals, the practical effect is less about generating the number and more about consistency. Once a declaration is filed with PAN details and tagged with a UIN, the record becomes easier to retrieve, reconcile and compare across reporting systems.

That matters especially for people who maintain bank deposits, investment income or other financial assets in India while living or working abroad. A mismatch between an Indian no-TDS declaration and a U.S. filing can invite scrutiny under frameworks that now put more emphasis on financial accuracy.

The U.S. side of that scrutiny has widened since 2025. The IRS-DHS agreement signed by Noem and Bessent allows the sharing of specific taxpayer data with ICE, and the February 24, 2026 appeals court decision removed a barrier that had previously slowed the program.

Edlow’s December 22, 2025 statement tied that effort directly to immigration fraud enforcement. His comments also showed how tax compliance and immigration integrity now appear together in agency messaging.

None of that changes the immediate Indian filing rule: Form 121 now stands where Forms 15G and 15H once did. But the replacement form comes with a more structured recordkeeping system, mandatory quarterly reporting and an identifier built for machine tracking.

Key Dates and Policy Milestones

In numerical terms, the framework rests on a few fixed points. The UIN is 26 characters long, Part B of Form 121 must be filed quarterly, PAN is mandatory for identity verification, and April 1, 2026 marks the effective date after Notification No. 01/2026 on March 30, 2026.

Around that timeline sit the U.S. milestones that shape the cross-border context: the IRS-DHS data-sharing agreement in April 2025, Edlow’s statement on December 22, 2025, the USCIS Policy Manual update in January 2026, and the D.C. Circuit Court of Appeals ruling on February 24, 2026.

Official U.S. agency statements and updates remain available through the USCIS newsroom and DHS. Those sites, together with the Indian tax portals, frame a policy picture in which tax declarations, identity records and immigration review now connect more directly.

For many account holders in India, the form change may appear technical at first. Yet the combination of a mandatory UIN, quarterly digital reporting and PAN-linked no-TDS declarations means Form 121 is no longer only a paper substitute for Forms 15G and 15H.

It has become part of a denser compliance network. For NRIs, H-1B workers, L-1 visa holders and others with financial reporting duties in both India and the United States, the new system leaves less room for gaps between what they declare in one country and what they file in the other.