The Employees’ Provident Fund Organisation (EPFO), under the Ministry of Labour & Employment, has issued detailed guidelines for the implementation of the Income-tax Act, 2025, which comes into effect from April 1, 2026. The new framework introduces significant reforms in the process of claiming exemption from Tax Deducted at Source (TDS), particularly through the replacement of Forms 15G and 15H with a unified Form No. 121.
Unified Declaration Mechanism Introduced
Under the revised tax regime, Form No. 121 serves as a single consolidated declaration for taxpayers seeking non-deduction of TDS on specified incomes. This replaces the earlier dual system of Forms 15G (for individuals below 60 years) and 15H (for senior citizens).
The new form is applicable to resident individuals, Hindu Undivided Families (HUFs), and other eligible entities, provided their estimated total tax liability for the financial year is NIL. The declarant is required to furnish all relevant details in Part A, while the payer (such as EPFO offices) is responsible for completing Part B.
Optional but Beneficial for Eligible Taxpayers
Filing of Form No. 121 is not mandatory, and is intended only for those taxpayers who wish to avoid deduction of tax at source. However, such declarations must be submitted separately for each financial year and to each payer responsible for making the payment.
The declaration ensures that eligible individuals with income below the taxable threshold are not subjected to unnecessary TDS, thereby reducing the need for refunds and simplifying compliance.
Mandatory UIN Allocation and Reporting Requirements
EPFO has mandated that every Regional Office, acting as the payer, must assign a Unique Identification Number (UIN) to each Form 121 received. The UIN will include:
- Sequence Number
- Tax Year
- TAN of the payer
Further, all declarations received during a month must be compiled and uploaded electronically by the 7th of the following month on the Income-tax Department’s e-filing portal. These UINs must also be quoted in the Quarterly TDS Return (Form No. 140).
Digital Filing Facility Under Development
To enhance ease of compliance, EPFO has initiated steps to enable online submission and digital e-signing of Form No. 121 by members. Until this facility becomes operational, physically signed forms uploaded by members will continue to be accepted for reporting purposes.
Strict Compliance and Penalty Provisions
The EPFO has emphasized strict adherence to the new provisions. Non-compliance, including failure to assign UINs or incorrect reporting, may attract penalties under the Income-tax Act, 2025. Regional Offices have been directed to ensure full compliance and avoid regulatory discrepancies.
Awareness and Transitional Measures
All Zonal and Regional Offices have been instructed to sensitize eligible members regarding the transition to Form 121. Importantly:
- Claims submitted with Forms 15G/15H after April 1, 2026 will not be rejected
- However, Form 121 must be subsequently obtained from such members
This transitional approach ensures continuity while aligning with the new tax framework.
Key Benefits of the Reform
The introduction of Form No. 121 is expected to:
- Simplify compliance through a unified declaration system
- Reduce administrative burden on taxpayers and institutions
- Enable digital processing and real-time validation
- Improve transparency and tracking through UIN-based reporting
Background
Form No. 121 has been introduced under Section 393(6) of the Income-tax Act, 2025, replacing provisions under Section 197A of the earlier Act. The move is part of broader tax reforms aimed at modernization, digitization, and simplification of taxpayer services.
The Order can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/04/EPFO-issued-notification-on-Implementation-of-the-New-IT-Act-2025-Transition-from-Form-15G-15H-to-Consolidated-Form-121-for-TDS-exempted-Incomes-april142026.pdf
