I-T dept releases draft rules, forms for new Income Tax Act; seeks stakeholder inputs

The Income Tax department has released draft rules and forms under the new Income Tax Act, 2025, and invited inputs and suggestions from stakeholders as part of a wider consultative process ahead of the law coming into force from April 1.

New Income Tax Act from April 1

The new and simplified Income Tax Act, 2025, will replace the over six-decade-old Income Tax Act of 1961, to simplify provisions, reduce compliance burden, improving ease of understanding and making the law more taxpayer-friendly.

The department has sought comments from stakeholders on the draft Income-tax Rules, 2026, and the corresponding forms by February 22, after which the rules and forms under the new Act will be notified.

Draft rules and forms placed in public domain

E-filing utility for stakeholder feedback

Stakeholders have been encouraged to review the draft rules and forms and submit their inputs, which will be compiled and reviewed before final notification.

To facilitate submissions, a dedicated utility has been launched on the e-filing portal and has been accessible to all stakeholders since February 4, 2026. Inputs can be submitted by entering the stakeholder’s name and mobile number, followed by OTP-based validation. Suggestions must clearly specify the relevant provision of the proposed Income-tax Rules or the applicable form number, including the rule or sub-rule concerned.

Rules and forms significantly rationalised

The existing Income-tax Rules, 1962, comprise 511 rules and 399 forms. As a result of the proposed changes, including removal of redundancies and consolidation wherever possible, the draft Income-tax Rules, 2026, have been reduced to 333 rules and 190 forms.

With regard to income tax forms, the department said they have been simplified to a large extent for taxpayer convenience. Standardisation of common information across forms has been undertaken to reduce the compliance burden.

The forms have been designed to enable automated reconciliation and pre-fill capabilities, making the filing process more intuitive and less error-prone. The language used in the forms has also been simplified to avoid operational, administrative and legal ambiguities.

Ease of understanding and business

The rationalisation carried out in the rules is expected to simplify provisions and improve ease of understanding and comprehension. The proposed process simplifications are also expected to enhance ease of living and ease of doing business across all categories of taxpayers.

Along with the draft rules and forms, two navigators have been provided for guidance. One maps the existing rules with the new draft rules, while the other maps the existing forms with the new draft forms.