Form 121 Replaces Forms 15G and 15H for TDS Declarations at Post Offices

(INDIA) — India’s new income-tax rules replaced Form 15G and Form 15H with Form 121 for declarations seeking non-deduction of tax at source, changing the paperwork used by banks, post offices, senior citizens and small savers from tax years beginning on or after 1 April 2026.

The change sits within the shift to the Income-tax Act, 2025 and the Income-tax Rules, 2026. Form 121 is prescribed under Rule 211 of the Income-tax Rules, 2026 and linked to section 393(6) and 393(7) of the Income-tax Act, 2025, replacing the older declaration forms used to stop TDS where a taxpayer’s estimated liability is nil.

The Department of Posts also moved to the new system through SB Order No. 02/2026 dated 27 April 2026, directing post offices to apply revised declaration and reporting procedures that include Form 121, Form 97 and Form 98. That brings post office deposits and savings schemes deeper into the new compliance framework.

Under the earlier system, resident individuals below 60 years and certain other eligible persons used Form 15G when tax liability was nil, while resident senior citizens aged 60 years or above used Form 15H on the same basic principle. Banks, post offices, companies and other deductors accepted those forms to avoid TDS on interest and other specified income.

That split has now gone. A single form, Form 121, covers declarations that the tax payable on estimated total income for the relevant year is nil, allowing the payer to release specified income without deducting TDS if the declaration is validly submitted.

The form does not give an exemption from tax. It works as a preventive compliance tool, meant to stop tax deduction at source where the taxpayer’s final liability is expected to be nil, reducing refund claims and later administrative work.

The replacement also aligns the form structure and statutory references with the new law rather than changing the broad eligibility logic. Declarations that taxpayers earlier made through Form 15G or Form 15H must now move to Form 121 for tax years beginning on or after 1 April 2026.

Eligibility remains tied to the taxpayer’s estimated income and tax position. Individuals below 60, Hindu Undivided Families and trusts can submit Form 121 if the tax on estimated total income is nil and the aggregate amount of specified income does not exceed the maximum amount not chargeable to tax, wherever that threshold applies.

Senior citizens face a slightly different test, echoing the old Form 15H position. They must satisfy the nil-tax-liability condition on estimated total income, and that remains the central requirement under the new form.

The income categories covered are familiar to depositors and pensioners. They include interest on bank deposits, interest on post office deposits, interest on securities, dividend income, certain insurance commission payments, certain life insurance policy payments, income from units or mutual funds, recognised provident fund accumulated balance payments and other specified income falling under the relevant TDS provisions.

Post office depositors face a wider set of operational changes than a new declaration form number. The Department of Posts order covers revised tax compliance procedures across savings products such as Post Office Savings Accounts, Time Deposits, Monthly Income Scheme accounts, Senior Citizens Savings Scheme accounts, National Savings Certificates, Kisan Vikas Patra and Recurring Deposits.

Once interest crosses the applicable TDS threshold and the depositor’s final tax liability is still nil, Form 121 becomes the mechanism to prevent deduction. If the declaration is not filed before income is credited or paid, TDS may be taken first and the taxpayer may have to claim a refund in the income-tax return instead.

Timing therefore matters in a practical sense, especially for deposits that credit interest monthly, quarterly, annually or at maturity. Filing at the start of the tax year, or before the first interest credit, reduces the chance that TDS will be deducted before the declaration reaches the payer.

The revised post office procedures also tighten PAN-linked reporting. Depositors must quote PAN for specified transactions, and where PAN is not available, Form 97 may be required, with related reporting through Form 98.

Post offices are no longer treated simply as places where households park savings. Under the new rules they also act as reporting entities, and the Department of Posts has directed that the detailed statement in Form 98, related to Form 97, be reported to the Income Tax Department under the 2026 schedule.

That change increases traceability and standardisation in transactions that had long been seen by many depositors as routine paperwork. PAN quoting, declaration filing and reporting obligations now sit closer together, particularly in small savings products that attract retirees, rural savers and families managing deposits for older relatives.

Residents considering Form 121 must still calculate total estimated income for the year, not the income from a single account. A depositor with nil tax on one post office Time Deposit but taxable income after adding pension, bank fixed deposit interest, rent or other receipts should not file the declaration merely to avoid TDS.

The same caution applies to people who spread savings across institutions. A declaration submitted to one bank or one post office does not automatically cover another payer, and taxpayers may need to file separately with each deductor.

Non-resident Indians sit outside the plainest reading of this system. The earlier Form 15G and Form 15H process generally applied to residents, and the guidance around Form 121 continues to refer to resident eligibility.

That leaves NRIs in a more restricted position. TDS on payments to non-residents often follows separate provisions and treaty-related procedures, so NRIs with Indian deposits, inherited accounts or repatriation-related income need to verify residential status, the section that applies to the payment, and any treaty benefit documents before sending declarations.

Confusion over the purpose of the form is likely to persist because the old forms were often treated as a shorthand way to stop tax. Form 121 does not make interest or dividend income tax-free; it prevents deduction at source where the taxpayer’s estimated final liability is nil.

If the taxpayer’s total income later exceeds taxable limits, tax can still fall due at return filing stage. The relief is one of cash flow, not final liability.

Senior citizens, who were among the most frequent users of Form 15H, now need to check whether each bank, post office or financial institution has fully shifted to Form 121. They also need to ensure PAN details are correct, calculate estimated total income accurately, confirm that tax liability is nil and retain acknowledgments of the declaration.

That administrative step matters most where households hold multiple fixed deposits and savings instruments across several institutions. Interest from all deposits must be counted together before the declaration is filed, not assessed account by account in isolation.

The same transition reaches younger resident individuals who previously used Form 15G. Their eligibility still depends on nil tax liability and, where applicable, on the aggregate specified income not exceeding the maximum amount not chargeable to tax.

In practice, the shift from Form 15G and Form 15H to Form 121 leaves the core principle intact while changing the compliance architecture around it. The familiar declaration survives, but the numbering, legal references, PAN procedures and post office reporting system now point to the Income-tax Act, 2025 and the Rules of 2026.

Taxpayers who continue using the old terminology after 1 April 2026 risk delays, incorrect submissions or avoidable TDS deductions. The new paperwork is now the operative one: Form 121 for non-deduction declarations, Form 97 where PAN is unavailable in specified cases, and Form 98 for related reporting inside the post office system.