Income-tax Rules 2026: There is going to be a big change in the income tax system of the country from April 1, 2026. The Income Tax Department has released the Draft Income-Tax Rules, 2026 as well as the Draft Tax Return Forms, which for the first time clearly show how the new Income-Tax Act, 2025 will actually work.
People’s suggestions have been sought on these drafts for 15 days i.e. till February 22, 2026. For this, the Income Tax Department has invited taxpayers, professionals and industry bodies to review these proposals and give feedback and has said that its objective is to make the rule making process more participatory and practical.
‘The End’ of the 60 year old system
The current tax laws in our country have been in place since 1961. The new Income Tax Act, 2025 will replace it. It will be further improved with people’s suggestions and will be implemented from April 1, 2026. The aim of the government is to modernize the tax related rules and present them in simple language. This is the reason why the number of rules has been reduced from 511 to 333. With this, the new system will be understood more easily and the number of disputes with the department will also reduce.
What’s new for taxpayers?
Tax experts say the rules proposed in the draft will replace the 1962 income tax rules, which have been in place for more than six decades along with the 1961 Income Tax Act. There was a need for improvement in these because they no longer fit with today’s economic and digital environment.
Under the new rules, emphasis is being laid on simplifying the tax forms. These forms will follow electronic filing standards, which are said to include many modern features like automated reconciliation and pre-fill.
Giving information about the draft rules and forms, Income Tax Department sources said, “Income tax rules and forms have been rationalized. Under the proposed Income Tax Rules, 2026, the number of rules has been reduced to 333, while the number of forms has been reduced to 190. Under the Income Tax Rules, 1962, their numbers were 511 and 399 respectively. In the proposed Income Tax Rules, the language has been simplified and those compliances which are no longer required have been removed.
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