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A depositor hands the payer a Form 15G, 15H or Form 121, and the payer is unsure whether it can stop deducting TDS.
The payee declares that tax on estimated total income is nil. The payer checks eligibility and PAN, keeps the declaration and reports it; then no TDS is deducted on that income.
A declaration register: payee PAN, form, tax year, date received, identification number given, income covered.
Interest paid without TDS, declarations reported in the TDS statement, and no surprise mismatch for the payee.
Form 15G and Form 15H are self-declarations by a payee that the tax on their total income for the year will be nil, so the payer of interest or similar income should not deduct TDS. From tax year 2026-27, both are replaced by a single Form 121 under the Income-tax Rules 2026. The payer collects it, checks it, keeps it and reports it.
Form 15G vs Form 15H
| Point | Form 15G | Form 15H |
|---|---|---|
| Who can file | Resident individual below 60, or an HUF | Resident individual aged 60 or above |
| Income condition | Tax on total income nil, and the income declared within the basic exemption limit | Tax on total income nil (income may exceed the basic exemption limit) |
| Validity | One financial year; a fresh form each year | One financial year; a fresh form each year |
| Who cannot file | Companies, firms, non-residents | Companies, firms, non-residents |
| From tax year 2026-27 | Replaced by Form 121 | Replaced by Form 121 |
The Form 121 mapping comes from the Income Tax Department’s Form 121 FAQs, which link it to Section 393(6) of the Income-tax Act 2025 and Rule 211 of the Income-tax Rules 2026.
Who accepts these forms, and what must the deductor check?
Banks, post offices, NBFCs, companies paying interest on deposits or debentures, and other payers of interest commonly receive them. The payer should:
- Confirm the payee is a resident individual or HUF, not a company or firm.
- Check the PAN is quoted and valid. A declaration without a PAN is not valid.
- Check the form is for the current year and is signed.
- Give it an identification number and keep it on file.
- Report the declarations as the rules require, including in the quarterly TDS statement.
The payer is not expected to audit the payee’s income, but should not accept a form it knows to be false. The payee must give a separate form to each payer.
How does income on these forms appear in the payee’s statement?
The payer still reports the interest in its quarterly TDS statement, flagged as paid without deduction because of the declaration. The payee may see the income with nil TDS in Form 26AS (for periods up to 31 March 2026) or Form 168 (from tax year 2026-27). There is no credit, because no tax was taken. The income is still taxable income to be shown in the return.
Worked example
A depositor earns ₹60,000 interest from a company deposit in a year.
- With a valid declaration: no TDS. The depositor receives the full ₹60,000.
- Without one: at an assumed 10 percent, TDS is ₹6,000. The depositor receives ₹54,000 and must claim ₹6,000 back in the return.
Thresholds also matter. For bank interest, TDS under Section 194A applies only above ₹50,000 a year (₹1,00,000 for senior citizens) from 1 April 2025, so a declaration is needed only when interest is likely to cross the limit.
What to read next
- Next in the series: Section 194A interest TDS
- TDS reconciliation for NBFCs
- Form 26AS vs Form 168
TransactIG reconciles TDS, so interest paid without deduction against a declaration is visible alongside the deducted entries. See TDS reconciliation software and reconciliation software for India.