Lower or nil TDS, Form 121 and no-PAN cases
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Updated 03 Oct 2026
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AI summary
When less TDS or no TDS is deducted, and when more is.
4 sections
Lower or nil deduction certificate
A receiver whose real tax is lower than the TDS can apply online on TRACES for a lower or nil deduction certificate (old section 197).
- The certificate names the payer, rate, amount limit and period.
- The payer must follow it only up to that amount and period.
- Verify it on TRACES before using it.
Form 121 (earlier 15G / 15H)
- A person whose total income is below the taxable limit can give Form 121 to a bank or company so no TDS is cut on interest or dividend.
- Senior citizens used Form 15H. Others used 15G. Both are now Form 121.
- From tax year 2026-27, the form can be given once to the depository to cover dividends from all companies.
- A false declaration is an offence. Do not give it if your income is taxable.
Transporters
No TDS on payments to a transporter who owns 10 or fewer goods carriages and gives PAN with a declaration.
No PAN
- TDS is generally 20%, or the normal rate if higher.
- For purchase of goods and e-commerce payments, it is 5%.
- Always collect PAN before the first payment and check it on the income tax portal.
Law as of September 2026. Verify against the latest notifications before relying on it for filings.
Sources
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