10 Big Mistakes To Avoid While Filing Form 121 (TDS Exemption Guide)

From April 2026, Form 121 has replaced Form 15G and 15H. These two forms used to have around 2 crore combined declarations submitted annually, in the last five years.

All that will be done through a single consolidated form 121 from this tax year. So, if you want to claim TDS exemption on the interest earned on FDs, bonds or other eligible instruments, you would need to submit this new form.

But do you know, a single mistake in your Form 121 can cost you hundreds or thousands of rupees. Or even worse, it may land you in jail for of upto 2 years. 

In this blog, we are explaining what key mistakes you should avoid while filing this new Form 121 under the new Income Tax Act 2025.

10 Mistakes To Avoid While Filing Form 121

1. Filing this form even though you have taxable income

One of the primary eligibility criteria for filing Form 121 is that you have a total liability of zero on your income. Only then are you eligible to claim this TDS exemption. So if you fall into the taxable category, your form is likely to get rejected. Also note that  the estimated total income gets calculated after allowing for deduction(s) under Chapter VIII (such as PPF, NPS, insurance premium, etc), or set off of loss, if any, under ‘Income from house property’, and rebate allowable under section 156 of the Act.

2. Filing this form as a company, firm, or NRI

Another key eligibility criterion clearly mentioned by the Income Tax Department is of who can and cannot apply for this TDS exemption claim. Form 121 is strictly meant to be applied by resident individuals and HUFs only. And if you are a company, a firm or an NRI, do not submit this form.

3. Getting your PAN details wrong 

Having a valid PAN is mandatory for filing Form 121.¹ If your PAN turns out to be invalid or the details are entered incorrectly, your form becomes invalid too. This means the payer can go ahead and deduct the applicable TDS on your investments.

4. Using abbreviations in the form

The otherwise simple task of filling your name in the form can go wrong if you use any abbreviations. So just write your full name exactly as it appears on your PAN card.

5. Submitting the form to only one payer

The income tax department has clearly mentioned that you need to submit this form to each payer separately, and that too in every tax year.

But if you have multiple investments with a single payer, you need to fill the form only once a year.

So for example:  If you have 3 FDs with ABC Bank or multiple bonds from the same issuer, just one Form 121 would be sufficient. But if your investments are spread across different banks or issuers, you’ll need to submit separate forms to each one.

6. Entering the wrong email ID.

When filing in your email ID in Form 121, make sure you only enter that email ID which is linked to your Demat Account.

7. Filling the wrong tax year

Tax year is a new term that replaces “assessment year” and “previous year” under the new Income Tax Act 2025.

In this form, you need to mention the current financial year ‘2026–27’ as tax year, since that’s when your income is being taxed. Entering the wrong tax year can make the payer reject your form.

8. Only including your interest income in Step 13

The next mistake many of you can make while filing Form 121 is not including all your estimated income when required to do so in step 13 of the Form.²

This step clearly requires you to include your salary, rent, pension etc and not just the interest income that you filed in this and previous Form 121s. So be careful when filing this figure.

9. Declaring false information

Do not declare any false information in your Form 121, as there is a penalty and possible jail term of up to 2 years for doing so, as per Section 482 of the Income Tax Act 2025.³

10. Submitting the form late

Lastly, make sure you fill this form 121 on time. Ideally you should submit it at the beginning of the financial year or before the first payment is expected. 

In case you end up submitting it later, your TDS would be deducted but you can still claim it back while filing the ITR for that tax year.

How Can You Submit Form 121 ?

You only need to fill Part A and submit it to the payer (the bank, bond issuer, etc)-either physically or digitally.

But if you’ve invested through our platform Grip Invest, you can fetch the form directly there. Most details are pre-filled for your convenience, and you only need to add a few things like previous ITR details and the declaration. 

You can check out the step-by-step guide by clicking here.

Conclusion

Filing Form 121 correctly is essential if you want to avoid unnecessary TDS deductions and ensure smooth tax compliance. While the form aims to simplify the process by replacing Forms 15G and 15H, even small errors like incorrect eligibility, wrong details, or delayed submission can lead to rejection or financial loss.

Taking a few extra minutes to review your details, understand eligibility, and submit the form on time can help you avoid these common pitfalls and make the most of the TDS exemption benefit.

To make the process simpler, platforms like Grip Invest offer pre-filled Form 121 access, helping investors complete and submit the form with ease and accuracy.

Author: Grip Invest Editorial Team The Grip Invest Editorial Team is a group of Chartered Accountants, MBA (Finance) graduates, and Qualified Research Analysts dedicated to helping you invest smarter. We dive deep into India's fixed income landscape to deliver content that is accurate, up-to-date, and easy to understand. Whether you're exploring bonds, fixed deposits, or other fixed income opportunities, our guides cut through the noise and give you the clarity to make better financial decisions.

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