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Form 121 for Fixed Deposits: Eligibility and How to Avoid TDS

June 11, 2025

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If your fixed deposit interest crosses the applicable threshold, your bank may deduct TDS even when your final tax liability is nil. If you meet the prescribed conditions, you can request non-deduction of TDS by submitting Form 121.

Effective from 1 April 2026, Form 121 replaced Forms 15G and 15H under the Income-tax Act, 2025. It combines the two earlier declarations into one form for eligible taxpayers.
This guide explains what Form 121 is, who can submit it, when and where it should be submitted, and the mistakes you should avoid while making the declaration.

What is Form 121 for Fixed Deposits?

Form 121 is a self-declaration that you can submit to a bank or other payer to request non-deduction of TDS on specified income, including eligible fixed deposit interest. The form does not make your FD interest tax-free. It only informs the bank that your estimated tax liability for the tax year is nil and that you meet the applicable eligibility conditions.

You must continue to report your complete interest income when filing your income tax return. Your final tax liability will depend on your total taxable income and the provisions applicable to you.

Who Can Submit Form 121?

Your eligibility depends on your age and estimated income:

If you are below 60: Your estimated tax liability for the tax year must be nil. The aggregate specified income covered by the declaration must also not exceed the maximum amount not chargeable to tax.
If you are 60 or older: You can submit Form 121 if the tax on your estimated total income for the tax year is nil.
Other eligible persons: Certain eligible persons, such as HUFs and trusts, may also submit Form 121, subject to the prescribed conditions.
PAN requirement: You must quote a valid PAN in the declaration.

Review income from all sources before submitting the form. An incorrect declaration may lead to tax and compliance consequences.

How is Form 121 Different From Forms 15G and 15H?

Form 121 simplifies the process by replacing the two earlier forms with a single declaration. The eligibility conditions continue to vary according to the declarant’s age and income.

Particular	Earlier requirement	Current requirement
Taxpayers below 60	Form 15G	Form 121
Taxpayers aged 60 or older	Form 15H	Form 121
Applicable law	Income-tax Act, 1961	Income-tax Act, 2025
Relevant provision	Section 197A	Section 393(6)
Declaration frequency	Every financial year	Every tax year
PAN requirement	Mandatory	Mandatory

When and Where Should You Submit Form 121?

Submit Form 121 at the beginning of the tax year or before the bank deducts TDS on your eligible interest income. A fresh declaration is required for every tax year.

You should also submit the form when:

You open or renew an FD and expect the interest to cross the applicable TDS threshold
Your combined interest from deposits with the bank may cross the threshold
Your income position changes but your estimated tax liability remains nil

If you hold deposits with different banks, submit Form 121 separately to every bank from which you expect to receive eligible interest income. Include the required details of your income and interest-bearing investments in the declaration.

Submission channels may vary between banks. Ujjivan SFB customers currently need to visit their nearest branch to submit Form 121, as the earlier Form 15G and Form 15H submission facility is no longer available through Internet Banking or Mobile Banking.

Before submitting the declaration, you can use a fixed deposit calculator to estimate your FD interest for each deposit. Consider the combined interest from all your eligible deposits when checking whether the applicable TDS threshold may be crossed.

Why Submitting Form 121 Matters

You should submit Form 121 for the below reasons:

1. Prevents unnecessary TDS
If your estimated tax liability is nil and you meet the prescribed conditions, submitting Form 121 can prevent TDS from being deducted on eligible interest income.

2. Reduces the need to claim a refund
If TDS is deducted despite your final tax liability being nil, you may need to claim the amount as a refund while filing your income tax return. Timely submission can help you avoid this additional step.

3. Supports better cash flow
Non-deduction of unnecessary TDS allows you to receive the eligible interest amount without waiting for a refund. However, you must still report the interest as income and calculate your final tax liability correctly.

4. Consolidates the earlier declarations
You no longer need to determine whether Form 15G or Form 15H applies. Form 121 provides a unified declaration, although the eligibility conditions still differ based on your age and income.

What Mistakes Should You Avoid When Submitting Form 121?

Submitting the form without checking eligibility
Do not submit Form 121 solely because your FD interest is below the TDS threshold. You must satisfy the prescribed conditions, including having nil estimated tax liability.
Excluding income from other sources
Consider your estimated total income from all sources, not only the interest earned from one fixed deposit or bank.
Confusing non-deduction of TDS with tax exemption
Form 121 does not make FD interest exempt from tax. You must report the complete interest income in your return and pay any tax that becomes due.
Providing incorrect deposit details
Include the required details of the deposits and income for which you are seeking non-deduction of TDS.
Not quoting a valid PAN
PAN is mandatory for Form 121. An incomplete or invalid declaration may not be accepted.
Submitting the declaration late
If the bank has already deducted TDS, submitting Form 121 later may not reverse the earlier deduction. You may need to claim credit or a refund while filing your income tax return.
Not submitting a fresh form
Form 121 is valid only for the relevant tax year. Submit a fresh declaration for each tax year if you continue to meet the eligibility conditions.

Final Thoughts

Form 121 can help prevent unnecessary TDS on your fixed deposit interest when your estimated tax liability is nil and you meet the prescribed conditions. However, it does not make your interest income tax-free or remove your obligation to report it in your income tax return.

Before opening a deposit, compare the interest rate, tenure, payout option, premature-withdrawal terms and likely TDS treatment. Once you have selected a suitable option, you can book FD online, subject to the applicable eligibility, KYC and product terms.

Disclaimer:

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FAQs

Form 121 is a unified self-declaration through which eligible taxpayers can request non-deduction of TDS on specified income when their estimated tax liability for the tax year is nil.

Yes. Form 121 replaced both Forms 15G and 15H for tax years beginning on or after 1 April 2026.

Individuals below 60, senior citizens and certain other eligible persons may submit Form 121 if they meet the applicable income and nil-tax-liability conditions.

Yes. You must quote a valid PAN in Form 121. A declaration without the required PAN details may not be accepted.

No. Form 121 only requests non-deduction of TDS. FD interest remains part of your taxable income and must be reported in your income tax return.

Submit it at the beginning of the tax year or before the bank deducts TDS on your eligible interest income.

Yes. You need to submit a fresh declaration for every tax year in which you meet the eligibility conditions.

Yes. If you receive eligible interest from different banks, submit the declaration separately to each bank or payer.

You can report the TDS in your income tax return and claim the applicable credit or refund, subject to your final tax liability and the information reflected in your tax records.

Ujjivan SFB currently requires customers to visit their nearest branch to submit Form 121. The earlier Form 15G and Form 15H option is no longer available through Internet Banking or Mobile Banking.