CBDT Notification No. 01/CPC(TDS)/2026

UIN Mechanism for Form 121 Under the Income-tax Act, 2025

The Central Board of Direct Taxes (CBDT) has issued Notification No. 01/CPC(TDS)/2026 dated 28 March 2026, prescribing a structured framework for the generation, allotment, and quarterly reporting of Unique Identification Numbers (UINs) in respect of declarations received in Form No. 121 under the Income-tax Act, 2025. Operative from 1 April 2026, this notification marks a decisive shift in how TDS non-deduction declarations — earlier managed through Forms 15G and 15H under the Income-tax Act, 1961 — are processed and reported under the modernised statutory framework.

I. Background and Statutory Context

The Income-tax Act, 2025 replaces the Income-tax Act, 1961 with effect from 1 April 2026, introducing a comprehensive legislative consolidation aimed at simplifying the language, structure, and compliance architecture of Indian direct tax law. Among the many procedural overhauls is the rationalisation of self-declaration forms used by taxpayers who seek non-deduction of tax at source on specified income streams.

Under the erstwhile Income-tax Act, 1961, individual taxpayers who wished to avoid TDS on interest, rent, dividends, and other specified payments were required to file either Form 15G (for resident individuals below 60 years of age and Hindu Undivided Families with total income below the taxable threshold) or Form 15H (for resident senior citizens aged 60 years and above). These two distinct forms, each carrying a separate UIN, created significant administrative duplication — particularly for payers such as banks, post offices, and companies required to track and report hundreds or thousands of such declarations every quarter.

The Income-tax Act, 2025 consolidates both forms into a single unified declaration instrument — Form No. 121 — introduced under Section 393(6) read with Rule 211 of the Income-tax Rules, 2026. The merger eliminates the categorisation ambiguity that frequently arose when taxpayers were unsure whether to file Form 15G or Form 15H, and streamlines the compliance burden for both declarants and payers alike.

II. What Is Form No. 121?

Form No. 121 is a statutory self-declaration filed by an eligible taxpayer — the declarant — to the payer (such as a bank, company, employer, or any other entity responsible for making the payment), stating that the estimated total income for the relevant tax year is nil after accounting for permissible deductions. Upon receipt of a valid Form 121, the payer is legally entitled to make the payment without deducting tax at source.

Form 121 is divided into two distinct parts:

• Part A — Payee’s Declaration: Contains personal particulars, PAN, income details, and the self-assessment of estimated total income. This is furnished by the declarant to the payer either in paper form or electronically (if the payer offers a digital channel).
• Part B — Payer’s Reporting Statement: Contains consolidated details of all declarations received in Part A, to be submitted quarterly on the Income-tax e-filing portal at www.incometax.gov.in within the timelines prescribed under Section 393(7) of the Income-tax Act, 2025.

Eligible declarants include:

• Resident individuals irrespective of age (consolidating the earlier 15G and 15H demarcation)
• Hindu Undivided Families (HUFs)
• Other specified entities that fulfil the prescribed income criteria

Companies, firms, and non-residents are explicitly excluded from the purview of this form. Quoting of PAN in Part A is mandatory. Declarations submitted without a valid PAN are treated as invalid, and the payer is required to deduct TDS at the applicable rate notwithstanding the declaration. This reinforces identity verification and linkage of declarations to individual tax profiles within the central database.

III. The UIN Framework Under Notification No. 01/CPC(TDS)/2026

The central subject of the notification is the structured prescription of a Unique Identification Number (UIN) system for every declaration received in Part A of Form No. 121. The UIN serves as a digital audit trail — a unique, machine-readable identifier that allows the Income-tax Department to reconcile and cross-reference declarations against actual TDS statements filed by payers.

Structure of the 26-Character UIN

Each UIN is a 26-character alphanumeric string comprising three mandatory fields:

The sequential numbering resets to ‘1’ at the commencement of each new tax year for every TAN, ensuring clean year-wise segregation across the central database.

Payer’s Obligations Under the Notification

The notification casts a clearly defined set of responsibilities on payers. Upon receiving a declaration in Part A of Form 121, the payer must:

• Generate and allot a UIN to each declaration received — whether in paper form or electronically — in strict accordance with Sub-rule (3) of Rule 211 of the Income-tax Rules, 2026.
• Digitise paper-form declarations and assign UINs in the same sequential order as electronic submissions. Paper declarations are not exempt from the UIN requirement.
• Furnish Part B of Form 121 on a quarterly basis via the Income-tax e-filing portal, incorporating details of all declarations received.
• Disclose UINs in the TDS quarterly statement filed under Rule 219, covering all declarations received during the tax year.

A critical element is that the UIN obligation applies irrespective of whether tax was actually deducted or not. Even where TDS was deducted notwithstanding receipt of a Form 121 declaration (for instance, due to PAN invalidity), the declaration must still be assigned a UIN and reported.

IV. Departure from the Earlier UIN System Under the 1961 Act

Under the Income-tax Act, 1961, a separate UIN was generated for each individual Form 15G or Form 15H received by each payer. This meant that if a taxpayer submitted declarations to five different payers, five independent UINs were generated across five different payer registers, with no consolidated linkage at the declarant level.

The new framework under the Income-tax Act, 2025 addresses this structural fragmentation. All declarations submitted by the same taxpayer to different payers will be linked to a single UIN at the departmental portal level. Payers will be provided a functionality to fetch the relevant UIN from the portal, ensuring consolidation, streamlined tracking, and elimination of duplication across the system.

This architectural shift significantly reduces the risk of fraudulent over-declaration — a known compliance loophole under the earlier framework — while simultaneously easing the administrative workload on individual taxpayers.

V. Practical Implications for Payers — Banks, Companies, and Institutions

The notification has wide operational implications for TDS-obligated payers across India. Commercial banks, cooperative banks, post offices, NBFCs, insurance companies, mutual fund distributors, and corporate treasury functions that routinely receive Form 15G and Form 15H declarations will need to recalibrate their back-end systems to accommodate the new UIN generation protocol from 1 April 2026.

Key operational changes include:

• Upgrading TDS management software to auto-generate UINs in the prescribed 26-character format for every incoming Form 121 declaration.
• Establishing a digitisation protocol for paper declarations received at branches or offices, ensuring sequential UIN assignment alongside electronic submissions.
• Configuring quarterly Part B reporting workflows on the Income-tax e-filing portal, with internal review checkpoints for completeness and accuracy.
• Training compliance and operations teams on Part A vs. Part B distinctions, UIN sequencing rules, and the annual reset of sequence numbering by TAN.

From a penalty and risk standpoint, failure to comply with UIN allotment and Part B reporting obligations can expose payers to consequences under the Income-tax Act, 2025 governing TDS defaults. The existing penal framework for non-furnishing or incorrect furnishing of TDS statements applies. Payers with annual TDS liabilities running into crores of INR — particularly large scheduled banks and public sector companies — should treat this transition as a high-priority compliance upgrade.

VI. Implications for Taxpayers — Declarants

For individual taxpayers, the transition to Form 121 simplifies the declaration experience. There is no longer any requirement to determine whether to file Form 15G or Form 15H — a single unified form serves all eligible resident declarants regardless of age. The eligibility conditions remain substantively unchanged: the declarant’s estimated total income for the tax year must be below the basic exemption limit after accounting for applicable deductions.

The form must be submitted to each payer separately, before the scheduled date of payment or credit of the relevant income. Taxpayers should note that the declaration is not a substitute for income tax return filing, and income covered by Form 121 declarations continues to form part of the declarant’s total income for assessment purposes.

Taxpayers who have estimated annual interest income below ₹2,50,000 (basic exemption limit for individuals below 60 years) or below ₹3,00,000 (for senior citizens) and have no other taxable income would generally be eligible to submit Form 121, subject to the specific conditions under Section 393(6). If you are unsure of your eligibility, our team at Chhota CFO can assist you with a personalised assessment.

VII. Effective Date and Transitional Considerations

The notification is explicitly operative from 1 April 2026, coinciding with the commencement of Tax Year 2026-27 under the Income-tax Act, 2025. Declarations filed before 31 March 2026 in Forms 15G and 15H for Financial Year 2025-26 will continue to be governed by the provisions of the old Act and need not be refiled in Form 121.

For Tax Year 2026-27 and all subsequent tax years, all new declarations must be furnished exclusively in Form No. 121. Payers should ensure that portal registrations, software configurations, and staff readiness are aligned for a seamless switchover on 1 April 2026. A grace or relaxation period has not been announced; full compliance from the first day of the new tax year is expected.

VIII. Conclusion — A Step Towards Systemic TDS Compliance

CBDT Notification No. 01/CPC(TDS)/2026 is a well-considered administrative measure that operationalises a critical compliance architecture of the Income-tax Act, 2025. By introducing a structured, technology-driven UIN framework for Form 121 declarations, the CBDT has moved decisively to close the gaps that existed in the earlier decentralised, payer-wise UIN system. The consolidation of Forms 15G and 15H into a single instrument, combined with enhanced UIN linkage at the departmental portal level, reinforces the Department’s commitment to reduced tax leakage, improved data quality, and a lighter compliance burden for honest taxpayers.

For payers — particularly banks, NBFCs, and large corporates — immediate action is required to ensure system readiness. For taxpayers, the change is straightforward and beneficial: one form, one process, and a cleaner digital trail. Professionals advising clients on TDS compliance under the new Act must factor Form 121 UIN obligations into their April 2026 readiness checklists without delay.

Need expert guidance on TDS compliance, Form 121, or transitioning to the Income-tax Act, 2025? Contact Chhota CFO today — our team of chartered accountants and tax professionals in Bengaluru is ready to assist.

Disclaimer: This article has been prepared by the knowledge team at Chhota CFO | CLAAT Corporate Advisors LLP, Bengaluru, for general informational purposes only. It does not constitute legal or tax advice. Readers are advised to seek professional guidance specific to their circumstances. All statutory references are as per the Income-tax Act, 2025 and Notification No. 01/CPC(TDS)/2026 dated 28 March 2026.