Effective April 1, 2026, Form 15H has been replaced by Form 121 under Income-tax Rules 2026 for senior citizens. According to reports from Upstox and Mint, the new form will be used by taxpayers to avoid tax deduction at source (TDS) if their tax liability for Tax Year 2026-27 will be nil. This change affects both taxpayers below 60 years and those aged 60 and above, as the Income-tax Department has consolidated the previous separate forms into a single declaration process. The system will automatically identify whether the filer is a senior citizen and apply the relevant provisions, reducing procedural complexity for taxpayers. As reported by Mint, the basic exemption limit under the old tax regime is ₹2,50,000 for individuals below 60 years, and ₹3,00,000 for senior citizens, while under the new tax regime, the limit is ₹4,00,000 for all individuals, making the age-based distinction no longer applicable.
Form 121 covers multiple income categories that were previously covered under Form 15G and Form 15H. As reported by Upstox and Mint, the covered income includes PF withdrawals and pension, insurance commission, rent, interest on deposits, income from Mutual Funds, payments in respect of Life Insurance Policy, and dividend income. According to Mint, interest income includes payouts from bank FDs, RDs, post office schemes, and corporate bonds, while dividends cover payouts from equity shares and mutual fund units. The form allows taxpayers to declare that their income falls below the basic exemption limit and should not be subject to TDS deduction by payers. For senior citizens with interest income or pension-based earnings, this means simpler filing processes but increased data integration, as transactions will be more closely tracked under the new system.
The payer must allot a 26-character UIN to each declaration received in paper or electronic form, according to the Income-tax Department guidelines reported by Upstox. The UIN consists of three fields: Sequence Number (ten alphanumeric characters beginning with ''''''''D'''''''' followed by nine digits), Tax Year (six digits representing the tax year), and Tax Deduction and Collection Account Number (TAN) of the payer. As reported by Mint, the UIN system enhances transparency and accountability in TDS filing by tracing notices and claims under the number, helping tax authorities assess and confirm submission of TDS claims to banks and companies while preventing erroneous filing of multiple TDS claims. Under the new system, a single unified challan-cum-statement will replace multiple forms for TDS on transactions such as rent, property, professional payments, and even crypto assets, using PAN instead of TAN to make compliance easier and more streamlined.
The transition to Form 121 introduces two non-negotiable digital prerequisites beyond the nil tax liability requirement. According to Mint, a taxpayer must disclose their income tax filing status for the last two tax years, with failure to file despite having taxable income flagging them as a "specified person," triggering higher TDS rates regardless of the form. Additionally, the PAN must be Aadhaar-linked and operative, as an inoperative PAN rendering Form 121 invalid is a fatal compliance error, mandating a 20% TDS rate under the new regulatory framework. As reported by Mint, tax experts warn that filing late in April means banks cannot refund tax once deducted, and submitting a single Form 121 to every payer/bank is required rather than relying on auto-approval systems. The new system also requires ITR linkage neglect even if exempt, with experts recommending that taxpayers report totals in ITR schedule TDS for audit-proofing.
The implementation of the Income-tax Act, 2025 and Income-tax Rules, 2026 from April 1 marks a significant shift toward fewer forms but deeper disclosures. For salaried taxpayers, the traditional Form 16 will be replaced by Form 130, a more detailed statement capturing salary income, tax deducted, and deductions claimed. Additionally, a new Form 123 will record perquisites and fringe benefits such as accommodation, company cars, concessional loans, travel, meals, and gifts, which will be digitally linked to Form 130. Taxpayers will need to be more accurate and proactive, as the new system leaves less room for mismatches while increasing transparency across income and transactions. The threshold for reporting insurance premiums has been lowered, meaning more transactions will now reflect in the Annual Information Statement (AIS), with disclosures for capital gains and foreign remittances becoming more granular requiring transaction-level details rather than aggregated figures.
