Draft guidelines for new I-T Act released by CBDT

lipped from: https://www.financialexpress.com/money/draft-guidelines-for-new-i-t-act-released-by-cbdt-4135138/

The Central Board of Direct Taxes (CBDT) has released the draft Income-tax Rules, 2026, marking a major procedural overhaul to align with the new Income-tax Act, 2025.

CBDT Unveils Draft Income-Tax Rules 2026 to Simplify the New Tax Act

The Central Board of Direct Taxes (CBDT) has released the draft Income-tax Rules, 2026, a detailed procedural framework for the new Income-tax Act, 2025, which is set to take effect from April 1. The government has simplified the language of the rules and provided formulas and tables wherever necessary.

While the Income-tax Rules, 1962 contains 511 rules and 399 forms, the draft Income-tax Rules, 2026 contains 333 rules and 190 forms. “Forms have been designed in a smart way so as to provide for automated reconciliation and also prefill capabilities so as to make filing more intuitive and less error-prone. These smart forms would considerably ease the filing and enhance the user experience,” the CBDT said.

Smart Forms and Digital Trails

The draft rules introduce refinements such as enhanced digital audit requirements for recognized stock exchanges under Rule 4, mandating a seven-year audit trail, prevention of transaction erasures, client detail recording including PAN, and monthly reporting of modifications to the Director General of Income-tax (Systems) for greater transparency.

Elevating Standards

Rule 10 lays provisions for accountants and valuers, requiring at least ten years of experience, minimum annual receipts thresholds, and international presence criteria for foreign professionals to ensure higher-quality certifications. In Rule 6, guidelines have been laid for attributing deemed capital gains under section 67(10), distinguishing between short-term and long-term assets, including blocks of assets and self-generated goodwill, to offer more certainty in complex scenarios.

Rule 57 consolidates fair market value determination into a single table-based provision for assets like immovable property, jewellery, and artistic works, retaining the Rs 50,000 threshold for optional registered valuer reports and focusing on open market values.

The new draft rules replace the Income-tax Rules, 1962, and are currently open for public feedback until February 22.

Sandeep Jhunjhunwala, Partner at Nangia Global, said the long-overdue rationalisation of archaic perquisite thresholds, such as tax free at-work meal value, gift received from employer, etc – a reform that has been widely sought and brings the income tax framework closer in line with contemporary economic realities.

“A marked difference also appears to have been made in the definition of Accountant for the purpose of various certification under the new Income Tax Act, which now stands revised to individual professionals with not less than 10 years’ experience and annual receipt in the year preceding certification to be more than Rs 50 lakh and in case of Partners in any entity engaged in rendering accountancy or valuation services, the annual receipt of the entity in the year preceding certification, exceeds Rs 3 crore,” Jhunjhunwala said.