Rule 211: Nil-tax declaration for receiving income without TDS (Form 121)
Rule 211 covers the declaration under section 393(6) that a person's estimated total income will bear nil tax, so that certain income is paid without TDS. The declaration is made in Form No. 121, electronically or on paper. The payer must allot a unique identification number to each declaration every quarter and report them in its TDS statement under Rule 219, even for a quarter with no deduction. An income-tax authority can call for the declaration within seven years from the end of the tax year of receipt.
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Bare law
Rule 211 - Declaration by person claiming receipt of certain incomes without deduction of tax under section 393(6)
(1) A declaration under section 393(6) shall be furnished in Form No. 121.
(2) The declaration referred to in sub-rule (1) may be furnished in any of the following manner:— (a) electronically after duly verifying through an electronic process; or (b) in paper form.
(3) The person responsible for paying any income or sum of any nature referred to in section 393(6), shall allot a unique identification number to each declaration received by him in Form No. 121, during every quarter of the financial year in accordance with the procedures, formats and standards specified by the Director General of Income-tax (Systems).
(4) The person responsible for paying any income or sum of any nature referred to in section 393(6), shall furnish the statement of deduction of tax referred to in rule 219, containing the particulars of declaration received by him during each quarter of the tax year along with the unique identification number referred to in sub-rule (3), regardless of the fact that no tax has been deducted in the said quarter.
(5) Subject to the provisions at sub-rule (4), an income-tax authority may, before the end of seven years from the end of the tax year in which the declaration has been received, require the person referred to in sub-rule (3) to furnish or make available the declaration for the purposes of verification or any proceeding under the Act.
Rule breakdown
The declaration — Rule 211(1) and (2)
The declaration under section 393(6) is furnished in Form No. 121, either electronically after verifying it through an electronic process, or in paper form.
Section 393(6) of the Act covers a written declaration that the tax on the person's estimated total income for the tax year will be nil. It is available to a resident individual for the listed incomes and to certain other persons, subject to the Note to that sub-section on the maximum amount not chargeable to tax, which does not apply to a resident individual aged sixty or more.
Payer duties — Rule 211(3) to (5)
The payer must allot a unique identification number to each Form No. 121 received during every quarter of the financial year, following the procedures, formats and standards specified by the Director General of Income-tax (Systems).
The payer must report the particulars of declarations received in each quarter, with their unique identification numbers, in the TDS statement under Rule 219, even if no tax was deducted in that quarter.
An income-tax authority may, before the end of seven years from the end of the tax year in which the declaration was received, require the payer to furnish or make available the declaration for verification or any proceeding under the Act.
Finance Act 2026 changes to section 393
Section 84 of the Finance Act, 2026 renumbered section 393(6) as section 393(6)(a) and inserted section 393(6)(b) with effect from 1 April 2027. Clause (b) allows the declaration also to be furnished electronically to a depository for income from units, interest on securities or dividends held with the depository, where the securities are listed on a recognised stock exchange, in the prescribed procedure and manner.
The same section substituted section 393(7). The payer must now deliver the declarations received to the prescribed income-tax authority on or before the seventh day of the month immediately following the end of each quarter in which they are furnished. The Finance Act, 2026 provisions came into force on 1 April 2026 except where it states otherwise.
Key takeaways
Form No. 121
The section 393(6) nil-tax declaration is in Form No. 121.
Report even with no TDS
Declarations are reported in the Rule 219 statement even for a quarter with no deduction.
Seven-year window
Authorities can call for declarations up to seven years after the end of the tax year of receipt.
Practical checklist
- Payers: allot a unique identification number to each declaration every quarter.
- Payers: include declarations in the Rule 219 statement even for quarters with no deduction.
- Payees: file a declaration only where tax on estimated total income will be nil.
Avoid
- Payers: do not discard declarations before the seven-year period has passed.
- Payees: do not assume the depository route in section 393(6)(b) is available before 1 April 2027.
FAQs
Which form is used for a nil-tax declaration under section 393(6)?
Form No. 121, under Rule 211(1).
Can Form No. 121 be filed on paper?
Yes. Rule 211(2) allows electronic furnishing after verification through an electronic process, or paper form.
Must the payer report declarations if no tax was deducted?
Yes. Rule 211(4) requires the particulars to be reported in the Rule 219 statement regardless of whether tax was deducted in the quarter.
How long must the payer be able to produce the declaration?
An income-tax authority may call for it before the end of seven years from the end of the tax year in which it was received.
Glossary
- Form No. 121
- Declaration under section 393(6) that tax on estimated total income will be nil.
- Unique identification number
- The number the payer allots to each declaration under Rule 211(3).