Form 121 Replaces Forms 15G/15H From AY 2026–27: How To Claim If TDS Has Been Deducted

Many taxpayers submit declarations to banks and financial institutions to ensure that tax is not deducted at source on eligible interest income and certain other payments when their final tax liability is nil. From Assessment Year 2026–27, this process will undergo a change with the introduction of Form 121, which will replace the existing Forms 15G and 15H.

The new form is intended to streamline the declaration system for eligible resident taxpayers. However, despite submitting the form correctly, there may still be situations where Tax Deducted at Source (TDS) is deducted by the bank or deductor because of reporting delays, processing issues, or mismatches in records.

Eligibility To Submit Form 121 

Form 121 is meant for resident taxpayers whose final tax liability comes to zero after claiming all eligible deductions and exemptions. “Under the old tax regime, the basic exemption limit is Rs 2.5 lakh for individuals below 60 years and Rs 3 lakh for senior citizens, while under the new tax regime, the exemption limit is Rs 4 lakh for all individuals. Only taxpayers falling within these conditions are eligible to submit Form 121,” says Aarjav Jain, executive director and Non Resident Indian (NRI) tax expert, Dinesh Aarjav and Associates Chartered Accountants.

How To Claim Refund If TDS Is Deducted 

If TDS is detected even after submitting Form 121, the taxpayer can claim the amount back while filing the Income Tax Return for the relevant year. Normally, the deducted tax starts reflecting in Form 26AS and AIS after it is deposited by the deductor with the Income Tax Department.

“While filing the return, the taxpayer simply needs to report the income correctly and claim the TDS credit in the relevant section of the ITR. After the return is filed and verified, the department processes it and refunds the excess tax, if any, directly to the linked bank account,” says Jain.

No separate set of documents is usually required to be attached to the ITR since the filing process is electronic. Even so, taxpayers should keep supporting papers safely on record in case any clarification is sought later by the department. “These may include the acknowledgement of Form 121, Form 16 or Form 16A, Form 26AS, AIS/TIS details, bank statements, and proofs relating to deductions claimed.

In most cases, refund delays happen because of a mismatch in TDS figures, so taxpayers should carefully ensure that the amount appearing in Form 26AS is exactly the same as the amount claimed in the return,” says Jain.

FAQs

Who can submit Form 121?

Resident taxpayers whose final tax liability is nil after claiming all eligible deductions and exemptions (per applicable basic exemption limits).

What if TDS is still deducted after submitting Form 121?

Claim the TDS refund while filing your ITR by reporting the income and claiming TDS credit; the excess will be refunded after processing and verification.

What documents should I keep if TDS is deducted?

Keep Form 121 acknowledgement, Form 16/16A, Form 26AS/AIS, bank statements, and proofs of deductions for any future verification.