Rules and Forms Income Tax
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 5th March, 2026
G.S.R. 158(E).— In exercise of the powers conferred by section 295 read with section 285BA of the Incometax Act, 1961 (43 of 1961), the Central Government hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:––
1. (1) These rules may be called the Income-tax _________ (Amendment) Rules, 2026.
(2) They shall come into force on the 1st day of January, 2026.
2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), in Rule 114F,––
(a) in clause (1),––
(A) after sub-clause (v), in the Explanation,––
(I) in clause (a), the following provisos shall be inserted, namely:–
“Provided that for an account other than a U.S. reportable account, the provision of this clause shall apply with the effect that the phrase “financial Institution in the ordinary course of a banking or similar business” shall be substituted by the phrase “depository institution”:
Provided further that for an account other than a U.S. reportable account, a “depository account” shall also include —
(i) an account or notional account that represents all specified electronic money products held for the benefit of a customer; and
(ii) an account that holds one or more central bank digital currencies for the benefit of a customer’;
(II) after clause (a), the following clause shall be inserted, namely:–
‘(aa) “central bank digital currencies” means any digital fiat currency issued by a Central Bank;’;
(III) in clause (h),––
(i) in sub-clause (vi), after item (D), the following shall be inserted, namely:––
“(E) a foundation or capital increase of a company provided that the account satisfies the following requirements, namely: —
(i) the account is used exclusively to deposit capital that is to be used for the purpose of the foundation or capital increase of a company,
as prescribed by law;
(ii) any amounts held in the account are blocked until the Reporting Financial Institution obtains an independent confirmation regarding
the foundation or capital increase;
(iii) the account is closed or transformed into an account in the name of the company after the foundation or capital increase;
(iv) any repayments resulting from a failed foundation or capital increase, net of service provider and similar fees, are made solely to
the persons who contributed the amounts; and
(v) the account has not been established more than 12 months ago:
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