Listen to this article in summarized format
The Income Tax Department has released the draft Income-tax Rules, 2026. These draft rules are proposed to come into effect from April 1, 2026. The draft rules have simplified Income Tax Return (ITR) filing forms among many other initiatives.
Income Tax Guide
Income Tax Union Budget FY 2026-27 LiveIncome Tax Slabs FY 2025-26Income Tax Calculator 2025
The draft rules cover a wide range of other rules in detail such as the method for determining the period of the holding of capital assets in certain cases, guidelines for the notification of zero coupon bonds, and procedures related to applications by infrastructure entities, among others.
How long will the draft Income-tax Rules and forms remain open for public feedback?
The draft rules and forms shall remain in public domain for a period of 15 days, i.e., up to February 22, 2026. All stakeholders and members of the public are requested to go through these draft rules and forms and provide considered feedback on the same so as to make the exercise of the framing of subordinate legislation more participative and effective, says Central Board of Direct Taxes (CBDT) in a statement.
Sandeepp Jhunjhunwala, Partner at Nangia Global: “The income-tax forms have been rationalised and will henceforth be identified by Serial Nos 1-190, in lieu of the existing alphanumeric nomenclature. The forms have been drafted in a clearer, more accessible language to avoid operational, administrative, or legal uncertainty, and the notes thereto have been correspondingly simplified. Notably, draft Form No 26, audit report and statement of particulars required to be furnished under Section 63 of the Income-tax Act, 2025, provides for ICDS adjustments and may require further overhaul later, as the Union Budget 2026 proposes to merge ICDS with Ind-AS and scrap separate tax accounting requirements from tax year 2027-28.”
Rohit Jain, managing partner, Singhania & Co., says the introduction of rigorous reporting obligations for ‘Crypto-Asset Service Providers’ and the alignment of due diligence norms with global standards signal a robust approach to curbing base erosion.
“While the continued emphasis on faceless proceedings and digitised dispute resolution is a welcome step towards reducing litigation friction, the granular reporting requirements under the new Annual Information Statement (AIS) framework will significantly increase the compliance burden. Businesses must view this not merely as a regulatory update, but as a systemic shift towards a transparent, data-driven tax regime,” says Jain.
Will new ITR forms and technology improve tax filing and taxpayer services?
CBDT says new forms which are part of the draft rules have also been simplified to a large extent for the ease of the tax payers. Standardisation of common information has been done across the forms with a view to reducing the compliance burden of the taxpayers. 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.
They would also enable centralised processing and data-driven decision making so that the technology is used to provide better services to the taxpayers, says CBDT.
The language of the forms has also been simplified so as to avoid any operational, administrative or legal ambiguity.
Fewer rules and ITR forms under new draft Income-tax Rules, 2026?
The Income-tax Rules, 1962 contains 511 rules and 399 forms. As a result of the changes proposed in new rules and forms, including removal of redundancy and consolidation of rules wherever possible, draft Income-tax Rules, 2026 contains 333 rules and 190 forms.
What are the two new navigators and how can taxpayers give feedback?
The government has launched two navigators – one providing the mapping of the old rules and the new draft rules and the second providing the mapping of the old forms and the new draft forms are also provided for the guidance of stakeholders and the public. The feedback is also proposed to be obtained rule -wise and form-wise.
aniltikotekar4sme.com 