To prevent a bank from deducting Tax Deducted at Source (TDS) on Fixed Deposit interest, take this step

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To prevent a bank from deducting Tax Deducted at Source (TDS) on Fixed Deposit interest, an eligible depositor must submit Form 121.

Form 121 has been introduced as a unified self-declaration form that replaces the earlier age-based Form 15G and Form 15H system.

Key points regarding submission of Form 121 are as follows:

  • Eligibility Requirement: Form 121 can be submitted only if your estimated total income for the entire financial year—including FD interest, salary, pension, rental income, and any other income—is below the taxable limit and your net tax liability for the year is expected to be zero.

  • Single Form for All Individuals: Unlike the earlier system where non-senior citizens used Form 15G and senior citizens used Form 15H, Form 121 is a single standardized declaration form applicable to all eligible resident individuals, irrespective of age.

  • Submit at the Beginning of the Financial Year: The form should ideally be submitted in April, at the start of each financial year. If TDS has already been deducted before submission, the bank cannot reverse or refund the deduction. Any excess TDS can only be claimed later by filing an Income Tax Return (ITR).

  • Fresh Submission Every Year: Form 121 is valid only for the financial year for which it is submitted. A new declaration must be provided every year as long as the fixed deposits remain active and eligibility conditions continue to be met.

  • Separate Submission for Each Bank: If you have fixed deposits with multiple banks, Form 121 must be submitted separately to each bank. However, one Form 121 submitted to a particular bank generally covers all eligible FD accounts held by you within that bank's network.

Submitting Form 121 on time helps ensure that unnecessary TDS is not deducted from FD interest when your overall income is not taxable.


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