TDS is deducted across many incomes including, bank interest, dividends, even rent.
But it often continues even when the income isn’t actually taxable. And the only way to get that money back is to file your ITR and then wait months for a refund.
This is what Form 121 is meant to address.
What is Form 121?
Form 121 is a self-declaration form that individuals can submit to prevent TDS on incomes like bank interest, dividends, rent, or pension.
By filing it, you’re informing the payer that your income is not taxable, so tax shouldn’t be deducted on your income in the first place.
This helps you avoid unnecessary TDS deductions and the long wait for refunds.
Who should file it?
You should submit Form 121 if this sounds like your situation:
- You are a resident individual in India.
- Your total estimated income for the tax year is below the basic exemption limit.
- After considering all deductions and rebates, your final tax liability is zero.
What incomes does it cover?
Form 121 is a single form that covers:
- Interest from banks, post offices, or securities.
- Dividends from shares or mutual funds.
- Rent from specified persons – tenants that are businesses, or individuals paying more than ₹50,000 per month.
- Insurance commission and life insurance policy payouts.
When should you submit it?
You should submit Form 121 at the beginning of the tax year – ideally in April or at the very least, before your first interest or dividend is credited. This prevents TDS from being deducted from the start.
You need to give the form to the entity making the payment (the deductor). This could be your bank, insurance company, or the organisation where you hold bonds or similar investments.
Form 121 needs to be submitted every tax year to your deductor to stay valid.
Draft Form No. 121.pdf (218.0 KB)
Questions? Let’s sort them out.