The Central Board of Direct Taxes (CBDT) has issued Notification No. 01/CPC(TDS)/2026 dated March 28, 2026. The notification lays down a detailed framework for the generation, allotment and reporting of Unique Identification Numbers (UINs) for declarations made in Form No. 121 under the Income Tax Act, 2025.
The new system will come into effect from April 1, 2026 and will apply to all payers responsible for handling declarations where tax is not deducted under Section 393(6).
What is the Key Change?
Under the new rules, whenever a payee submits a declaration in Part A of Form 121 (for non-deduction of tax), the payer is now required to:
- Generate a Unique Identification Number (UIN) for each declaration
- Maintain proper records of such declarations
- Furnish Part B of Form 121 on a quarterly basis
This applies regardless of whether tax has actually been deducted or not.
Structure of the UIN
The CBDT has prescribed a 26-character UIN format, comprising three components:
- Sequence Number (10 characters)
- Starts with "D" followed by 9 digits
- Tax Year (6 digits)
- Example: 202627 for FY 2026-27
- TAN of the Payer (10 characters)
Example format: 0000000001202627MUMN12345A
Additionally:
- The sequence resets every financial year
- Applies separately for each TAN
Digital and Paper Declarations Covered
The notification ensures uniformity by covering both:
- Electronic submissions and
- Paper-based declarations (which must be digitized by the payer)
Even manually received declarations must be assigned a UIN and included in reporting.
Quarterly Compliance: Part B Filing Mandatory
Payers must now submit Part B of Form 121 every quarter through the Income Tax e-filing portal, which includes:
- Details of all declarations received
- Corresponding UINs
- Reporting even if no tax deduction occurred
This creates a comprehensive audit trail for all non-TDS transactions.
Legal Backing
The framework has been introduced under:
- Section 393(6) & 393(7) of the Income Tax Act, 2025
- Rule 211 and Rule 332 of the Income Tax Rules, 2026
These provisions collectively ensure that non-deduction claims are properly tracked and verified.
Why This Matters
This move is expected to:
- Enhance transparency in TDS exemptions
- Prevent misuse of no-deduction declarations
- Improve data tracking and reconciliation
- Strengthen compliance monitoring by tax authorities
For businesses and tax professionals, this marks a shift towards more structured and data-driven TDS compliance.
Action Points for Payers
- Update systems to generate UINs automatically
- Ensure digitization of paper declarations
- Align compliance teams for quarterly reporting
- Verify PAN details of declarants
- Maintain proper audit records
Click here to view/download the official copy of the notification
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