Form 15G & 15H Are Ending
Dated 08.03.2026 : If you rely on fixed deposits, recurring deposits, or dividends for regular income, you are likely familiar with the annual ritual of submitting Form 15G or 15H to your bank to avoid Tax Deducted at Source (TDS).
But get ready for a major shift. With the introduction of the new Income Tax Act, 2025, taking effect on April 1, 2026, the Central Board of Direct Taxes (CBDT) is overhauling the system. Under the Draft Income-Tax Rules 2026, the traditional Forms 15G and 15H are being phased out and replaced by a single, consolidated document: Form 121.
Here is exactly what this means for your tax planning in FY 2026-27
What is Form 121?
Form 121 is the newly proposed unified declaration form. Instead of having separate forms based on age, everyone eligible—from young professionals to senior citizens—will now use Form 121 to declare zero tax liability and request non-deduction of TDS on their interest and dividend income.
Key Changes You Need to Know
The transition isn’t just a simple name change. The CBDT is tightening the compliance framework:
- Mandatory ITR History: The biggest update is that you must now provide your Income Tax Return (ITR) acknowledgment numbers for the last two financial years directly on the form.
- 7-Year Record Keeping: Banks and financial institutions are strictly mandated to retain your submitted Form 121 for seven years, ensuring the Income Tax Department can easily cross-verify the data.
Who is Eligible to File Form 121?
The eligibility rules depend heavily on your age and your final tax liability.
1. Individuals Below 60 Years (Replacing Form 15G)
- The Rule: Your estimated total income for the financial year must not exceed the basic exemption limit (₹4 Lakhs under the new default tax regime).
- The Trap: If your income is above the basic exemption limit (say, ₹6 Lakhs) but your actual tax drops to zero because of standard tax rebates, you cannot file Form 121. Your total estimated income must strictly stay below the basic threshold.
2. Senior Citizens 60 Years & Above (Replacing Form 15H)
- The Rule: Your estimated total tax liability for the financial year must be Nil (Zero).
- The Advantage: Senior citizens get more breathing room. Even if your total income crosses the basic exemption limit, you can still file Form 121 as long as your final calculated tax is zero after applying all available rebates (which can shield up to ₹12 Lakhs of income for seniors under the proposed rules).
3. HUFs and Other Entities
- The Rule: Certain non-individuals can file Form 121 for specific income streams.
- The Anomaly: Currently, the draft text appears to exclude Hindu Undivided Families (HUFs) from filing Form 121 declarations specifically for dividend income. Tax professionals have flagged this issue, and we expect a correction before the final official notification.
Coming Soon: The “File Once” Depository System
The Union Budget 2026 also introduced a massive relief measure that will ease compliance starting April 1, 2027.
Instead of submitting separate forms to every single bank or mutual fund house, you will be able to submit your Form 121 just once directly to your depository (NSDL or CDSL). The depository will then electronically transmit your zero-tax declaration to all relevant institutions where you hold dematerialized securities.
What You Should Do Now
For now, Form 121 is still in the draft stage. For the current financial year, continue using the existing Forms 15G and 15H. However, as we approach April 2026, ensure your ITRs for the past two years are filed and easily accessible, as you will need those acknowledgment numbers the first time you fill out Form 121.
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