I have no other income except Interest earned on deposits made in a Bank. The Approximate Interest will be Rs.8.00 Lacs for the FY 2026-2027 (hence my total income for the year will be Rs.8.00 Lacs only). Can i Submit form 121 to bank for not to deduct TDS as my income would not attract any tax under new tax regime, As In new tax regime tax is nill for income upto 12,00,000.00 with tax rebate.
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Form 121 eligibility for non deduction of TDS for Interest Payments
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Quick Summary
Summary: Form 121 is the new unified declaration (replacing 15G/15H) that you can use to avoid TDS on interest income if your total tax liability for the year is nil. If your calculation confirms your tax liability is zero, you are eligible to submit it to your bank.
Form 121 (self-declaration of non-deduction) only works when your total income is BELOW the basic exemption limit (Rs 3 lakh under new regime). It is not valid just because your final tax liability comes to zero after the Section 87A rebate.
With Rs 8 lakh interest income, you are above the Rs 3 lakh basic exemption threshold, so banks are legally required to deduct TDS. The Section 87A rebate reduces your tax to zero but does not affect the bank's TDS obligation at source.
What you can do:
- File your ITR-2 for AY 2026-27 declaring the interest income, compute your final tax (zero after Section 87A), and claim a full refund of the TDS deducted
- If you are a senior citizen (age 60+) with total income below Rs 5 lakh and no business income, Form 15H is the correct self-declaration form , not Form 121
- For non-senior-citizens, there is no valid self-declaration to stop TDS when income exceeds the basic exemption, even if final tax is zero
The refund route is straightforward: e-file the ITR, the refund processes within 20-40 days after verification.
For help filing ITR-2 with interest income and TDS refund claims, Tax Garden's [TDS filing service](https://taxgarden.in/tds-filing) covers Form 26AS reconciliation and accurate TDS refund claims.
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