Form explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Form No. 125 is a short declaration by a specified senior citizen to the specified bank, so that the bank can compute tax on pension and interest income and deduct accordingly. Form No. 126 is an application by a branch of a non-domestic banking company or insurer, or of another person carrying on business in India through a branch, for a certificate to receive certain sums without deduction of tax. This guide explains both as printed in the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026.
Under rule 208, the declaration under section 402(39)(c) read with section 393(1) (Table, serial number 8(iii)) may be furnished by the specified senior citizen to the specified bank in Form No. 125; the bank computes total income after allowable deductions and rebate and deducts tax at the rates in force. Under rule 209, a person in the rule's Table may apply in Form No. 126 for a certificate under section 395(1); the certificate is valid for the tax year it names and a fresh application can be made after the expiry or "within three months before the expiry".
Form No. 125: the specified senior citizen's declaration
The rule
Section 393(1) of the Income-tax Act, 2025 sets out deduction of tax at source in a Table, and serial number 8(iii) of that Table relates to the specified senior citizen. The detail of the table row is in the post on section 393 on insurance payouts, goods, perquisites, e-commerce and virtual digital assets. Rule 208(1) says the declaration may be furnished to the specified bank in Form No. 125. The bank must, after giving effect to the deduction allowable under Chapter VIII and the rebate allowable under section 156, compute the total income for the relevant tax year and deduct income-tax on it at the rates in force (sub-rule (2)); the deduction under Chapter VIII is based on evidence furnished during the tax year (sub-rule (3)); and the bank maintains the declaration and the evidence and makes them available to the Chief Commissioner of Income-tax when required (sub-rule (4)). See rules 208 to 210 for the rule.
If you are a pensioner working out how much tax your bank will deduct, our TDS compliance team can help you check the declaration and the supporting evidence.
What the form asks
Form No. 125 has one block of twelve rows:
| Rows | What it asks |
|---|---|
| 1 to 4 | Name, address, PAN, date of birth |
| 5 to 7 | Tax year (the year in respect of whose income the declaration is made, Note 3), email ID, contact number |
| 8 to 10 | Name of the specified bank; name of the employer from which pension is drawn; Pension Payment Order number |
| 11 | The accounts with the bank, with account number and whether individual or joint |
| 12 | Whether the senior citizen is opting out of the new tax regime under section 202 |
Note 4 says that the deduction and rebate allowable are in accordance with the new tax regime unless the individual opts out of it. The declaration is that the information is complete and correct and that the signatory has no income other than income of the nature of pension, interest or both, received or receivable only in the accounts of the specified bank stated in the form. The signatory gives PAN, date, place and name. There is no time limit in the rule or the form, and there is no accountant's certificate.
Form No. 126: certificate for receipt without deduction of tax
The section and the rule
Section 395(1) of the Act lets a payee, where tax is required to be deducted, apply to the Assessing Officer for deduction at a lower rate or no deduction. The Assessing Officer, if satisfied that the payee's total income justifies it, issues a certificate, and the payer then deducts at the rate shown, or nothing, until its validity ends. The post on section 395 covers it, and the sibling form for a lower or nil certificate is in Form No. 128. Rule 209 is the rule for Form No. 126; see rule 209.
Who may apply: the rule 209 Table
| Person | Conditions | Nature of income or sum |
|---|---|---|
| 1. A banking company or an insurer (as defined in section 2(9)(d) of the Insurance Act, 1938) which is not a domestic company and which carries on operations in India through a branch | Regularly assessed to income-tax in India with returns furnished for the last five tax years that became due on or before the date of application; not in default or deemed in default in respect of any tax (including advance tax and tax under section 266), interest, penalty, fine or other sum; the interest or other sum is receivable by the branches on their own account and not for the head office, a branch outside India or any other person | Interest, not being interest on securities (other than interest on securities referred to in section 393(4), Table serial number 6), or any other sum not being dividends |
| 2. Any other person who carries on business or profession in India through a branch | The conditions above; carrying on business or profession in India continuously for not less than five years immediately before the application; value of fixed assets in India in the books for the tax year just ended (or the year before, if accounts are not yet made up) exceeding fifty lakhs of rupees | Any sum not being interest or dividends |
The Table refers to the Insurance Act, 1938, which is another law; check it where relevant.
Rule 209(2) says the certificate is valid for the tax year specified in it unless the Assessing Officer cancels it before that year ends. Rule 209(3) allows an application for a fresh certificate after the validity of the earlier one has expired, or within three months before its expiry.
What the form asks
| Part | What it asks |
|---|---|
| A: Particulars of the applicant (rows 1 to 10) | Name, PAN, status (Note 2 lists ten statuses), nature of entity (banking company, insurer, or person other than these), principal officer's name and designation, address of the Indian branch or branches, country of incorporation, address of the head office outside India, email ID, contact number |
| B: Declaration and Request (banking company or insurer) | The principal officer declares that the applicant is a banking company or insurer, not a domestic company, operating in India through the branches; that it is entitled to receive the interest and sums described during the stated tax year; that it fulfils the conditions of rule 209 (regular assessment and returns for five tax years, no default, receivable on own account); and requests a certificate to receive them without deduction of tax under section 393(2) (Table, serial number 17) |
| C: Declaration and Request (other persons) | The principal officer declares that the applicant is a non-resident assessee, not a banking company or insurer, carrying on business or profession in India through the branches; that it is entitled to sums other than dividends and interest during the stated tax year; that it fulfils the five conditions (continuous business for five years, fixed assets above fifty lakhs, regular assessment and returns, no default, own account); and requests the certificate |
Each declaration closes with a statement by the principal officer that what is stated in the application is correct (Part B) or true and correct (Part C), signed with name and designation. Notes cover names, statuses, address elements and pre-filled information.
Example
Retired schoolteacher Gopal Menon draws pension through a specified bank and has no other income except the interest in the same bank's accounts. For the tax year, he gives Form No. 125 to the bank with his Pension Payment Order number and account details, and answers "No" to opting out of the new tax regime. Separately, Northwind Bank NV, a foreign bank with an Indian branch, has been regularly assessed in India and is not in default; it applies in Form No. 126 Part B for a certificate to receive interest without deduction for the next tax year, filing its application within three months before the expiry of the earlier certificate.
Need help with a no-deduction declaration or certificate?
The declaration in Form No. 125 and the conditions in Form No. 126 each turn on facts that the bank or the Assessing Officer will look at closely. Our TDS compliance team can help you check whether you qualify and prepare the papers.
Key takeaways
- Form No. 125 is the declaration by a specified senior citizen to the specified bank under rule 208, so that the bank can compute and deduct tax on pension and interest.
- It states that the person has no income other than pension or interest received only in the specified bank's accounts.
- Form No. 126 is the application under section 395(1) by a branch of a non-domestic banking company or insurer, or another person with a branch in India, to receive sums without deduction.
- The certificate is valid for the tax year named; a fresh application can be made after expiry or within three months before it.
- Part B of Form No. 126 is for banking companies and insurers, Part C for other persons.
Read next
- Rules 208 to 210: specified senior citizen and no TDS on certain units
- Rule 209: certificate to receive interest without deduction, Form No. 126
- Form No. 127: buyer's declaration for goods without collection of tax
- Form Nos. 102 and 160: credit of tax deducted and refund claim under section 434
Disclaimer: Based on the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026, as consulted on 4 October 2026. It explains the words of the forms and rules only; later notifications, the forms and utilities on the e-filing portal, circulars and the way the tax authorities apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.