---
title: "Save TDS on Interest with Form 15G/15H – Easy Guide"
description: "Find out how to avoid TDS on interest income by submitting Form 15G or 15H. Includes eligibility, submission process, and scenarios where forms can be used."
canonical: "https://busy.in/tds/save-tds-on-interest-form-15g-15h/"
author: "Nitin Bansal"
published: "2025-08-04T11:35:29.000Z"
category: "TDS"
---

-   Forms 15G and 15H have been replaced by Form No. 121 for tax years beginning on or after 1 April 2026.
-   Form 121 is a self-declaration given to the payer, such as a bank or financial institution, so that TDS is not deducted when the taxpayer’s estimated tax liability is nil.
-   Resident individuals below 60, HUFs and other eligible non-company/non-firm persons need two conditions: nil estimated tax liability and aggregate specified income within the maximum amount not chargeable to tax.
-   Resident senior citizens need nil estimated tax liability, but the additional specified income cap does not apply to them.
-   For bank, co-operative bank and post office deposit interest, the TDS threshold is ₹50,000 for persons other than senior citizens and ₹1,00,000 for senior citizens.

This guide explains who can submit Form 121, how it differs from Forms 15G and 15H, when it should be used, and what mistakes taxpayers should avoid before giving a nil-TDS declaration.

# Form 121, Form 15G and Form 15H: Complete Guide for Saving TDS on Interest Income

## **What Changed from Form 15G and Form 15H to Form 121**

Earlier, taxpayers used Form 15G or Form 15H to request [**non-deduction of TDS on eligible income**](https://busy.in/tds/tds-on-exempt-income-or-lower-tax-liability/) . Form 15G was mainly used by resident individuals below 60 years of age, HUFs and other eligible non-company/non-firm persons. Form 15H was used by resident senior citizens aged 60 or more.

From tax year 2026-27 onwards, both forms have been replaced by Form No. 121. The [**declaration now works through one common form**](https://busy.in/tds/understanding-tax-deduction-at-source-tds-under-the-income-tax-bill-2025/) under [Section 393](https://www.incometaxindia.gov.in/w/section-393-5) (6) of the Income-tax Act, 2025, read with Rule 211 of the Income-tax Rules, 2026. For FY 2025-26 and earlier, taxpayers used Form 15G or Form 15H under Section 197A and Rule 29C.

The key change is that the earlier [**age-based split has been removed**](https://busy.in/tds/threshold-limits-for-tds-deduction-under-the-income-tax-act/) . Now, Form 121 captures the taxpayer’s age and eligibility details within the same form. However, the eligibility conditions are still not identical for everyone. Senior citizens need to satisfy the nil tax liability condition, while non-senior eligible persons must also check the specified income cap.

The main purpose remains the same. The taxpayer gives a declaration to the payer, such as a bank, post office, company or other deductor, stating that their estimated tax liability for the tax year is nil. If the declaration is valid, the payer should not deduct TDS on the specified income. The declaration must be submitted separately to each payer or deductor.

## **What is Form 121?**

Form 121 is a self-declaration used by eligible taxpayers to receive specified income without deduction of tax at source. It is submitted to the payer responsible for deducting TDS. In simple terms, Form 121 tells the payer that:

• The taxpayer’s [**estimated tax liability for the tax year is nil**](https://busy.in/tds/who-must-pay-tds-in-india-deductors-individuals-businesses-government/) .
• The taxpayer is eligible to receive the specified income without TDS.
• The taxpayer has considered earlier Form 121 declarations, if any, while estimating total income.

Form 121 is not a general request filed directly with the Income Tax Department. It is given to the relevant payer before the income is credited or paid.

## **Form 121 Eligibility**

Eligibility depends mainly on age, residential status, tax liability and the amount of specified income. For resident individuals below 60 and other eligible persons, such as HUFs, trusts and other non-company/non-firm persons, Form 121 can be submitted only when both conditions are met:

-   Tax on estimated total income for the tax year is nil.
-   The aggregate specified income for which Form 121 is being submitted does not exceed ₹4,00,000, which is the maximum amount not chargeable to tax under the new regime for tax year 2026-27.

This second condition is important. A non-senior taxpayer may have nil tax because of rebate, but Form 121 can still become invalid if the [**specified income covered by the declaration**](https://busy.in/tds/section-wise-tds-rate-table-for-fy-2025-26/) exceeds ₹4,00,000.

For resident senior citizens aged 60 years or more at any time during the tax year, the additional specified income cap does not apply. They can submit Form 121 if tax on estimated total income is nil.

## **TDS Thresholds on Interest Income**

For bank, co-operative bank and post office deposit interest, TDS applies when the interest exceeds the prescribed threshold. For tax year 2026-27, [**Section 393 lists the following TDS thresholds**](https://busy.in/tds/section-393-tds-on-professional-and-technical-fees-rates-threshold-due-dates-and-compliance-guide-for-tax-year-2026-27/) :

| Type of Interest Income | TDS Threshold |
| --- | --- |
| Bank, co-operative bank or [**post office deposit interest for senior citizens**](https://busy.in/tds/tds-on-fixed-deposits/) | ₹1,00,000 |
| Bank, co-operative bank or post office deposit interest for others | ₹50,000 |
| Interest on securities | ₹10,000 |
| Other specified interest cases | ₹10,000 |

Form 121 does not mean the income becomes exempt from tax. It only prevents TDS where the taxpayer is eligible. The income must still be considered while calculating total income.

## **When to Use Form 121**

Form 121 should be used when TDS is likely to be deducted even though the taxpayer expects no final tax payable for the year. Instead of [**waiting for a refund after filing the income tax return**](https://busy.in/tds/tds-refund-process-claim-refund/) , an eligible taxpayer can submit the declaration in advance to avoid unnecessary deduction.

It may be useful in cases such as bank or post office interest crossing the TDS threshold, a senior citizen with pension and FD interest but nil final tax liability, an HUF with eligible interest income within the permitted limit, or a [**taxpayer receiving eligible dividend**](https://busy.in/tds/tds-on-dividend/) , mutual fund income, PF withdrawal, insurance commission or rent where Form 121 is accepted by the payer.

The key point is timing. Submit Form 121 before the income is credited or paid. For bank interest, submitting it near the beginning of the tax year is safer because TDS may be deducted as soon as interest is credited.

## **When You Should Not File Form 121**

Do not submit Form 121 just because you want to avoid TDS temporarily. It is a legal declaration. Avoid filing it in these cases:

• Your tax liability is likely to be payable after including salary, business income, rent, capital gains, interest and other income.
• You are below 60 and your aggregate specified income is above the maximum amount not chargeable to tax.
• You are an NRI.
• You are unsure about large bonus, capital gains, business income or other income expected later in the year.
• Your interest income is below the TDS threshold and no deduction is expected anyway.

## **Income Types Covered Under Form 121**

Form 121 is not limited only to bank FD interest. Official Form 121 guidance covers specified incomes such as accumulated balance due to employee from recognised provident fund, insurance commission, rent, income from units, interest on securities, interest other than securities, [**life insurance payments and dividend**](https://busy.in/tds/section-194da-complete-guide-to-tds-on-insurance-policy-maturity-payouts/) .

| Income Type | Practical Example |
| --- | --- |
| Bank or post office deposit interest | FD, recurring deposit, eligible post office deposit interest |
| Interest on securities | Certain bond or security interest cases |
| Income from units | Mutual fund or specified unit income |
| Dividend | Dividend paid by domestic companies |
| PF withdrawal | Recognised provident fund withdrawal before eligible service period |
| Insurance commission | Commission income covered by the rule |
| Rent | Specified rent cases where Form 121 is allowed |
| Life insurance policy payment | Taxable policy payout cases covered under TDS rules |

Not every income in these categories will automatically qualify. The taxpayer must still satisfy the eligibility conditions.

## **How to Fill and Submit Form 121**

[Form 121](https://www.incometaxindia.gov.in/documents/d/guest/fn-121) has two main parts. Part A is filled by the taxpayer. [**Part B is handled by the payer or deductor**](https://busy.in/tds/how-to-file-tds-returns-online/) after receiving and verifying the declaration.

### **Details you should keep ready**

| Detail | What to Check |
| --- | --- |
| PAN | It must be valid and operative. |
| Name and address | Use details as per PAN and bank records. |
| Residential status | Form 121 is for eligible resident taxpayers. |
| Age status | Mention whether you are 60 or more during the tax year. |
| Tax year | Use the year for which the declaration is being made. |
| Nature of income | Example: FD interest, dividend, PF withdrawal. |
| Estimated income for this declaration | Income expected from that payer. |
| Earlier Form 121 declarations | Mention the number and aggregate amount, if already filed elsewhere. |
| Estimated total income | Include all income, not just the income from that bank or payer. |

The Income-tax Rules require a [**valid and operative PAN**](https://busy.in/tds/section-206aa-surcharge-cess-pan-requirements/) , TAN of the payer and proof of age where the declarant claims senior citizen status.

### **Where to submit Form 121**

Submit it to the payer responsible for deducting TDS. For example:

-   Submit it to the bank for FD or recurring deposit interest.
-   Submit it to the post office for eligible post office deposit interest.
-   Submit it to EPFO or the relevant authority for eligible PF withdrawal cases.
-   Submit it to the company, mutual fund or other payer for eligible dividend or unit income cases.

## What If TDS Has Already Been Deducted?

Form 121 prevents future TDS where the declaration is accepted before payment or credit. It generally [**does not reverse TDS already deducted**](https://busy.in/tds/what-is-tax-deducted-at-source/) . If TDS has already been deducted:

1.  Check whether the TDS appears in Form 26AS or AIS.
2.  Include the related income while filing the income tax return.
3.  [**Claim the TDS credit in the return**](https://busy.in/tds/form-26as/) .
4.  If your final tax liability is nil or lower than TDS deducted, claim the refund through ITR processing.

Do not ignore the income just because TDS was deducted. TDS is only a tax credit, not a final tax calculation.

## **Common Mistakes to Avoid**

-   Many taxpayers check only bank interest and ignore salary, pension, rent, business income, capital gains or dividends. Form 121 should be filed only after [**estimating total income for the year**](https://busy.in/tds/step-by-step-tds-calculation-with-payment-type-rates/) , not just the income from one bank or payer.
-   If you have deposits or eligible income with multiple payers, submit the declaration wherever required. A declaration given to one bank does not automatically cover income from another bank, company, post office or other deductor.
-   Don’t assume senior citizens are automatically exempt from TDS. Senior citizens get a higher TDS threshold and a simpler Form 121 condition, but TDS is not waived automatically. If TDS is otherwise applicable, the declaration still needs to be submitted.
-   Don’t treat nil TDS as tax-free income. Form 121 [**only prevents TDS where the taxpayer is eligible**](https://busy.in/tds/why-tds-is-important-for-tax-compliance-in-india/) .
-   For tax year 2026-27 onwards, use Form 121 instead of the older Form 15G or Form 15H format.
-   If your income increases during the year and tax becomes payable, inform the payer. Continuing with an incorrect declaration can create avoidable compliance risk.

## **Practical Examples**

### **Example 1: Non-senior taxpayer eligible for Form 121**

Rahul is 38 years old. His salary after standard deduction and FD interest are expected to result in taxable income below ₹12 lakh. His tax liability under the new regime becomes nil because of rebate.

His FD interest of ₹65,000 is the income being declared under Form 121. This is well below the ₹4,00,000 aggregate specified income cap. Since his tax liability is also nil, Rahul satisfies both conditions and can submit Form 121.

### **Example 2: Non-senior taxpayer not eligible despite nil tax**

Anita is 45 years old. Her total tax liability is nil after rebate, but her aggregate FD and bond interest covered by the declaration is ₹4,50,000. If the maximum amount not chargeable to tax is ₹4,00,000 under the applicable regime, she should not submit Form 121 because the specified income cap is breached. This is why the “income up to ₹12 lakh” idea should not be applied blindly.

### **Example 3: Senior citizen with pension and FD interest**

Mr. Sharma is 67 years old. He earns pension and FD interest. After considering the applicable rebate and deductions, his estimated tax liability is nil. His bank FD interest is above ₹1,00,000. Hence, he can submit Form 121 because senior citizens only need to satisfy the nil tax liability condition. The additional aggregate specified income cap does not apply to them.

### **Example 4: HUF with bank interest**

A HUF earns ₹2,80,000 as interest income and has no other income. Its aggregate specified income is below ₹4,00,000 and its estimated tax liability is nil. The Karta can submit Form 121 on behalf of the HUF, provided the HUF satisfies the nil tax and specified income conditions.

## **Consequences of False Declaration**

A false Form 121 is not a minor clerical mistake if the [**taxpayer knowingly gives incorrect information**](https://busy.in/tds/penalty-late-payment-filing/) . Section 482 of the Income-tax Act, 2025 covers false statements in verification or statements delivered under the Act or rules. The updated provision provides punishment based on the amount of tax that would have been evaded if the false statement had been accepted as true.

| Situation | Consequence Under Updated Section 482 |
| --- | --- |
| Tax that would have been evaded exceeds ₹50 lakh | Simple imprisonment up to 2 years, or fine, or both |
| Tax that would have been evaded exceeds ₹10 lakh but does not exceed ₹50 lakh | Simple imprisonment up to 6 months, or fine, or both |
| Other cases | Fine |

For businesses, accountants and tax professionals, TDS entries, deductor-wise records and year-end tax data need to stay organised. To manage accounting, billing, GST and compliance records in one system, explore BUSY, our [**accounting software**](https://busy.in/accounting-software/) .

## **Conclusion**

Form 121 is the updated declaration for receiving specified income without TDS from tax year 2026-27 onwards. It replaces the older Form 15G and Form 15H structure, but the basic principle remains the same: use it only when your estimated tax liability is nil and the other eligibility conditions are satisfied.

The most important correction is that nil tax alone is not always enough for non-senior taxpayers. Resident individuals below 60 and other eligible non-company/non-firm persons must also check the aggregate specified income cap. Senior citizens have a simpler condition, but they still need to submit the form to the payer before TDS is deducted.

## About the author

**Nitin Bansal**

I am a Fellow Chartered Accountant (FCA) and LLB graduate with 10 years of experience in corporate auditing, taxation, and financial consulting. My expertise includes corporate audits, income tax planning, HSN code classification, and GST rate advisory. Through my blogs and articles, I aim to simplify corporate taxation, auditing, and GST compliance, making financial matters more accessible for professionals and business owners.

## Frequently asked questions

### What should I do if I submitted Form 15G or 15H by mistake for tax year 2026-27?

Submit Form 121 to the payer as early as possible. If TDS has already been deducted before the correct declaration is processed, check Form 26AS or AIS and claim the credit while filing your income tax return.

### Is Form 121 required if my FD interest is below the TDS threshold?

Usually no. If the bank is not required to deduct TDS because your interest is below the applicable threshold, filing Form 121 may not be necessary.

### Can a person with ₹10 lakh income submit Form 121?

Possibly, but not automatically. The person must have nil tax liability, and if below 60, the aggregate specified income covered by Form 121 must not exceed the maximum amount not chargeable to tax.

### Can a senior citizen submit Form 121 even if interest income is above ₹1,00,000?

Yes, if the senior citizen’s estimated tax liability for the year is nil. The ₹1,00,000 limit is the TDS threshold for bank, co-operative bank and post office deposit interest, not a separate Form 121 eligibility ceiling.

### Can an NRI submit Form 121?

No. The declaration is meant for eligible resident taxpayers. NRIs should not use Form 121 for avoiding TDS.

### Can a company or partnership firm submit Form 121?

No. Companies and partnership firms cannot submit Form 121. The declaration is meant for eligible resident individuals and certain other eligible persons, but not companies or firms.

### Do I need to submit Form 121 every year?

Yes. The declaration is made for a particular tax year. If you remain eligible next year, submit a fresh declaration for that year.

### Should Form 121 be submitted online or offline?

Both are possible. Rule 211 allows the declaration to be submitted electronically after verification or in paper form. The actual mode depends on the payer’s process.

### What if my income changes after filing Form 121?

Inform the payer if your tax liability is no longer expected to be nil. This helps avoid reliance on an incorrect declaration.

### Do I still need to report the income in my ITR after submitting Form 121?

Yes. If you are required to file an income tax return, include the income in your return even if TDS was not deducted because of Form 121. The form only affects TDS deduction by the payer; it does not remove the income from tax reporting.

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- [Section 194DA: Complete Guide to TDS on Insurance Policy Maturity Payouts](https://busy.in/tds/section-194da-complete-guide-to-tds-on-insurance-policy-maturity-payouts/)
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