Important Update: New Procedure for Form 121 (Erstwhile Form 15G/15H) & UIN Allotment
With the implementation of the Income-tax Act, 2025, the landscape of TDS compliance in India is undergoing a significant transformation. One of the most notable changes is the replacement of the familiar Form 15G and Form 15H with a unified Form No. 121. A New Procedure for Form 121 (Erstwhile Form 15G/15H) & UIN Allotment has been notified.
To provide clarity on the operational aspects of this transition, the Directorate of Income-tax (Systems) recently issued Notification No. 01/CPC(TDS)/2026 (dated 28th March 2026). This notification prescribes the new procedures, formats, and standards that payers must follow starting from 01 April 2026.
The End of the 15G/15H Era
For decades, taxpayers used Form 15G (for those under 60) and Form 15H (for senior citizens) to declare that their total income was below the taxable limit, thereby requesting payers not to deduct TDS on interest, dividends, and other specified incomes.
Under the new regime, Form 121 acts as a single, unified self-declaration form. This move simplifies the process by removing age-based form selection, making it easier for both taxpayers to file and for deductors to process.
Key Highlights of Notification No. 01/CPC(TDS)/2026
The new notification focuses heavily on the standardization and tracking of these declarations through a Unique Identification Number (UIN).
1. Generation of the 26-Character UIN
Every declaration received by a payer in Part A of Form No. 121 must now be assigned a unique 26-character UIN. This number is not random; it follows a strict structure:
- Sequence Number (10 characters): Starts with the letter ‘D’ followed by nine digits (e.g., D000000001). This sequence resets to “1” at the beginning of each tax year for every TAN.
- Tax Year (6 digits): Represents the relevant tax year (e.g., 202627 for the 2026-27 tax year).
- Payer’s TAN (10 characters): The Tax Deduction and Collection Account Number of the entity receiving the declaration.
2. Mandatory Digitization
The Income Tax Department is pushing for a fully digital ecosystem. If a payer receives a declaration in paper format, they are now mandated to digitize it. These digitized records must follow the same UIN running sequence as those received electronically.
3. Quarterly Reporting Requirements
Compliance doesn’t end with allotting a UIN. Payers must furnish Part B of Form No. 121 on the e-filing portal (www.incometax.gov.in) every quarter.
Important Note: This filing is mandatory even if no tax was deducted during the quarter. The report must include the details of all declarations received along with their respective UINs.
4. The Role of PAN
A valid Permanent Account Number (PAN) remains the bedrock of this process. Any declaration in Form 121 without a quoted PAN is considered invalid, and the payer will be required to deduct tax at the applicable rates as per the Act.
Action Points for Payers and Tax Professionals
As we approach the new financial year starting 01 April 2026, it is crucial to:
- Update ERP/Accounting Systems: Ensure your software is capable of generating and storing the new 26-character UIN format.
- Review Internal Processes: Establish a workflow for digitizing physical declarations immediately upon receipt.
- Educate Clients/Payees: Inform your customers and payees about the switch to Form 121 to ensure they submit the correct documentation.
The shift to Form 121 and the introduction of a structured UIN represent a move towards greater transparency and automated monitoring of TDS exemptions. While it requires an initial administrative adjustment, the unification of forms is a welcome step toward simplifying Indian tax compliance.
References :-
Notification No. 01/CPC(TDS)/2026 dated 28th March 2026.
Section 393(6) and 393(7) of the Income-tax Act, 2025.
Rule 211 of the Income-tax Rules, 2026.
The Notification is provided below for your reference
Click Here to send an enquiry to us! Book Your Online/Inperson Appointment Now!