CBDT Introduces UIN System for Form 121 from April 1, 2026: Major Shift in No-TDS Declarations

The Central Board of Direct Taxes (CBDT) has introduced a new compliance framework mandating the generation of a Unique Identification Number (UIN) for every declaration filed under Form 121, effective April 1, 2026. Form 121, which replaces Forms 15G and 15H under the new Income Tax regime, is used by taxpayers to declare that tax should not be deducted at source on certain incomes. Under the new rules, every payer—such as banks, companies, or financial institutions—is required to assign a 26-character UIN to each declaration received, whether submitted electronically or in physical form, creating a standardized digital trail for all no-TDS claims. The UIN will consist of a sequence number, the relevant tax year, and the payer’s TAN, ensuring traceability and uniform reporting. Additionally, payers must file Part B of Form 121 on a quarterly basis through the income tax e-filing portal, detailing all declarations received, even where no tax has been deducted. The framework also mandates PAN-based verification of declarants and digitisation of paper submissions, aiming to enhance transparency, reduce misuse of exemption claims, and strengthen the overall TDS monitoring system under the Income Tax Act, 2025.