Draft income tax rules 2026 released, public feedback open till Feb 22

New Delhi: The Central government on February 7 released draft rules and forms under the new Income Tax Act, 2025, aimed at simplifying provisions, reducing compliance requirements and making the law more taxpayer-friendly.

The new Income Tax Act, 2025, which will replace the Income Tax Act of 1961 that has been in force for over six decades, is scheduled to come into effect from April 1.

The Income Tax Department has invited feedback from stakeholders on the draft Income-tax Rules, 2026, and the proposed forms until February 22, PTI reported. After reviewing the inputs, the final rules and forms will be notified.

Currently, the Income-tax Rules, 1962, comprise 511 rules and 399 forms. Following efforts to remove duplication and consolidate provisions wherever possible, the draft Income-tax Rules, 2026, have been reduced to 333 rules and 190 forms, the department said while seeking public comments.

Regarding the new income tax forms, the department said they have been significantly simplified to make them easier for taxpayers to use. Common information has been standardised across forms to lower the compliance burden.

"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," it said.

It added that the language used in the forms has been simplified to prevent operational, administrative and legal ambiguities.

The department said that rationalisation of the rules is expected to simplify provisions and improve understanding. The proposed process changes are intended to enhance ease of living and promote ease of doing business for all categories of taxpayers.

Along with the draft rules and forms, two navigators have been provided—one mapping the old rules to the new draft rules and another mapping the old forms to the new draft forms—to assist stakeholders and the public.

Nangia Global Partner Sandeepp Jhunjhunwala said the long-pending rationalisation of outdated perquisite thresholds, such as tax-free workplace meal values and gifts from employers, was a significant development that aligns the tax framework with modern economic conditions.

"Together, these measures signal a thoughtful and forward-looking approach to legislative implementation," he said.

Jhunjhunwala also pointed out that the definition of “Accountant” under the new Act has been revised. It now applies to individual professionals with at least 10 years of experience and annual receipts exceeding ₹50 lakh in the year prior to certification.

For partners, the threshold applies to entities offering accountancy or valuation services with annual receipts above ₹3 crore in the preceding year.

Grant Thornton Bharat LLP Partner (Tax) Richa Sawhney said the emphasis on technology, including pre-filled and reconciled forms, would reduce compliance time and minimise unintended errors.

How to submit your feedback?

• Visit https://www.incometax.gov.in/iec/foportal/
• Click on Suggestions on Proposed Income Tax Rules and Forms 
• Give your name and phone number
• Give OTP and follow instructions