CBDT Notifies Procedure for UIN Generation in Form 121

CBDT Notifies Procedure for UIN Generation in Form 121 – Key Rules from 1 April 2026

The Central Board of Direct Taxes (CBDT) has issued a notification prescribing the procedure, format, and standards for generating a Unique Identification Number (UIN) for Form No. 121 and the quarterly reporting of its details by the payer.

This framework will become effective from 1 April 2026 and applies to declarations submitted under the Income-tax Act, 2025.

This article explains the purpose, structure of UIN, compliance requirements, and reporting obligations for payers.

1. Background of Form 121

Under Section 393(6) of the Income-tax Act, 2025, certain payments can be made without deduction of tax at source (TDS) if the payee furnishes a declaration in Part A of Form No. 121.

The declaration must:

• Be submitted to the payer
• Contain PAN of the declarant
• Be provided either in physical form or electronically
• Be verified through an electronic validation process

Once the declaration is received, the payer must allot a Unique Identification Number (UIN) to each declaration.

2. Unique Identification Number (UIN) – Structure

Every declaration received in Form 121 (Part A) must be assigned a 26-character UIN.

The UIN consists of three components:

(1) Sequence Number

• 10 alphanumeric characters
• Starts with letter “D” followed by nine digits
• Example: D000000001

(2) Tax Year

• 6 digits representing the tax year
• Example:
  • Tax Year 2026–27 → 202627

(3) TAN of the Payer: 10-character Tax Deduction and Collection Account Number (TAN)

Example of a UIN

If the payer’s TAN is MUMN12345A and the declaration is the first one received for Tax Year 2026–27, the UIN will be: D000000001202627MUMN12345A

3. Sequence Number Rules

The sequence number used in the UIN follows these rules:

• It must be unique for each declaration
• It must follow a continuous running series
• The sequence resets to “1” at the beginning of every tax year
• The sequence is linked to each TAN separately

4. Handling Physical Declarations

If a declaration is received in paper form, the payer must:

1. Digitize the declaration
2. Generate the UIN using the prescribed format
3. Maintain the same running sequence series used for electronic declarations

This ensures uniform reporting and tracking of declarations.

5. Quarterly Reporting – Part B of Form 121

After receiving declarations, the payer must report them to the Income-tax Department.

Key requirement:

The payer must submit Part B of Form 121, which contains:

• Details of declarations received in Part A
• The UIN allotted to each declaration

This information must be filed:

• Quarterly
• In the prescribed file format
• Through the Income-tax e-filing portal

Even if no tax has been deducted during the quarter, the payer is still required to report the declarations along with their UINs in the TDS statement.

6. Compliance Timeline

The notification specifies that these procedures will be applicable from: 1 April 2026

Accordingly, all payers receiving declarations under Section 393(6) must ensure:

• Proper UIN generation
• Digitization of paper declarations
• Quarterly reporting of Form 121 Part B

7. Why This System was Introduced

The UIN framework aims to:

• Improve traceability of TDS exemption declarations
• Ensure accurate reporting in TDS statements
• Reduce misuse of non-deduction declarations
• Enable better compliance monitoring by the tax department

Conclusion: The introduction of UIN for Form 121 declarations represents an important compliance requirement under the Income-tax Act, 2025.

Businesses, deductors, and tax professionals must establish internal systems to:

• Track declarations received from payees
• Generate the correct 26-character UIN
• File the declaration details quarterly with the Income-tax Department

Early preparation will help organizations avoid reporting errors and ensure smooth TDS compliance from FY 2026-27 onward.

Example of UIN Generation under Form 121

To understand the UIN system better, consider the following examples.

Example 1 – First Declaration in a Tax Year

A company ABC Pvt. Ltd. has the TAN MUMN12345A.
During the Tax Year 2026–27, the company receives its first declaration in Part A of Form 121 from a payee requesting non-deduction of TDS.

The payer must generate the UIN as follows:

Generated UIN: D000000001202627MUMN12345A

This number must be quoted in records and while reporting the declaration.

Example 2 – Second Declaration in the Same Tax Year

Suppose the same company receives another declaration during the same tax year.

Generated UIN: D000000002202627MUMN12345A

The sequence number simply increases by one for every new declaration received.

Example 3 – New Tax Year

In the next tax year 2027–28, the sequence number starts again from 1.

Generated UIN: D000000001202728MUMN12345A

Example 4 – Paper Declaration Received

If the payer receives a physical (paper) declaration:

1. The payer must digitize the declaration.
2. A UIN must still be generated using the same sequence series.
3. The declaration details must be reported in Part B of Form 121 during quarterly filing.

For example, if it is the third declaration received, the UIN will be: D000000003202627MUMN12345A

Example 5 – Quarterly Reporting

Assume a payer receives three declarations in Quarter 1 of FY 2026-27.

These details must be reported in Part B of Form 121 while filing the quarterly TDS statement, even if no TDS was deducted.

Notification

Also Read: FAQs and Guidance notes on Forms under Income-tax Rules, 2026

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