What is Form 121?

When Should You Submit Form 121?

You should submit Form 121 to avoid TDS on your earned interest on FD. If you choose monthly or quarterly payouts, TDS is deducted each time interest is paid to you. If you have a multi-year fixed deposit with interest paid only at maturity, the interest accrues throughout the year, and the bank calculates and deducts TDS on this accrued amount at the end of each financial year. TDS is usually deducted at 10%, but this rate jumps to 20% if you haven't submitted your PAN to the bank.

For example, if the total taxable income is below the exemption limit, you must submit Form 121 to avoid deductions on the interest earned. Submitting Form 121 helps you avoid extra TDS in the first place, so you don't have to wait until you file your ITR to claim it back as a refund.

What Happens If There Is No PAN?

Even if you submit Form 121 without a valid PAN, it will not be accepted, and TDS will still be deducted at 20%. Without a PAN on record, the bank also cannot issue you a TDS certificate. Banks issue this certificate at the end of every calendar quarter, showing your fixed deposit details, the interest earned, and the TDS deducted, if any.

Eligibility Criteria to Submit Form 121

To successfully submit Form 121, you must meet the following requirements:

• You must have a valid PAN. Aadhaar-PAN linking is advisable to keep your PAN operative.
• You can submit Form 121 only if your total taxable income (including income from FD interest rates) is below the basic exemption limit under the Income Tax Act.

Note: For depositors under 60: the specific income being declared must not exceed the basic exemption limit. For senior citizens (60+): Form 121 can be filed as long as the estimated final tax liability is nil, even if total income is higher.

Documents Needed For Form 121

• Valid PAN (mandatory)
• Details of income or investments
• Age Proof (for senior citizens)
• TAN of the payer (Tax Deduction and Collection Account Number)

How to Submit Form 121

To submit Form 121, there are two methods: online and offline:

Online via NetBanking or Mobile App

Major banks have their own channel and way to file the declaration form; here are a few steps:

• Log in to your bank’s internet banking or mobile application.
• Go to the "e-Services", "Tax Services", or "Service Requests" section.
• Select the option "Form 121" or "TDS Waiver/Exemption".
• Enter your financial details.
• Submit using the OTP or net banking password

Offline Process Via Visiting a Bank/NBFC Branch

If you prefer the traditional method, you can easily go to the branch and hand over the documents:

• Download the latest Form 121 PDF directly from the Income Tax Department website or your bank’s official site.
• Fill Part A with complete details of PAN, complete address, age, and details of your IT₹
• Fill in all required details, sign the form, and submit the physical copy at the branch. Collect the acknowledgement receipt.

Note: Remember to leave Part B of the form blank, as the bank or financial institution will fill that part.

Wrapping Up

Submitting Form 121 isn't compulsory, but if you skip it, the bank will deduct TDS at 10% once your FD interest crosses the specified threshold in a financial year. If that happens, you'll need to wait until you file your ITR to claim the excess tax deducted as a refund. Submitting the form on time saves you this hassle and lets you enjoy your full interest income right away. So, before the first interest credit of the financial year, take a few minutes to submit Form 121. It can save you both time and money.