Ensure aggregate of small incomes doesn't breach exemption limit

The government has overhauled the tax deducted at source (TDS) declaration framework by introducing Form 121, which replaces the widely used Forms 15G and 15H.

- SANJEEV SINHA

These forms allowed eligible individuals, particularly small depositors and senior citizens, to avoid TDS on interest income when their taxable income fell below the basic exemption limit.

What has changed?

Under the Income-tax Rules, 2026, the government has reduced the number of rules from 511 to 333 and the number of forms from 399 to 190. “As part of this rationalisation, forms have been consolidated. For example, forms 15G and 15H have been merged into a single Form 121 for TDS self-declaration,” says Neeraj Agarwala, Nangia & Co.

Role of forms 15G and 15H

Under Section 197A of the Income-tax Act, 1961, a taxpayer whose total income was expected to remain below the basic exemption limit could submit a self-declaration to the payer, such as a bank or company, stating that their estimated tax liability for the year would be nil.