Top 10 key points about income tax rules 2026 from 1st April 2026
Here are the top 10 key points regarding the newly notified Income Tax Rules, 2026:
1. Effective Date and Naming The rules are officially designated as the Income-tax Rules, 2026 and will come into force starting April 1, 2026. They correspond with the new Income-tax Act, 2025.
2. Complete Restructuring of PAN and TAN Forms The old multi-purpose PAN applications (Forms 49A and 49AA) have been split into four distinct, category-specific forms: Form 93 for Indian individuals, Form 94 for Indian entities, Form 95 for foreign individuals, and Form 96 for foreign entities. Similarly, the TAN application (Form 49B) has been split into Form 134 (for government entities) and Form 135 (for non-government entities).
3. Single Unified Form for “No TDS” Declarations The rules eliminate the age-related confusion of the old framework by merging the age-specific Form 15G (for those below 60) and Form 15H (for seniors) into a single, unified Form No. 121. This form will apply to all eligible declarants regardless of their age.
4. New Forms for Salary TDS and Arrears Relief For salaried employees, the traditional Form 16 is entirely replaced by Form No. 130, which serves as the annual TDS certificate. Additionally, if you need to claim relief for mitigating tax liability on salary arrears or advance salary, you will now use the newly structured Form No. 39 (which replaces the old Form 10E) that features uniform computation tables and real-time validations.
5. New Mechanism for Transactions Without a PAN Under the new rules, individuals who do not possess a PAN but need to undertake specified transactions must file a declaration using Form No. 97 (replacing the old Form 60). The entities receiving these declarations must then report them to the Income Tax Department half-yearly using Form No. 98 (replacing the old Form 61).
6. Consolidated Tax Audit Report The complex, fragmented tax audit reporting process is streamlined. The three former tax audit forms (Form 3CA, Form 3CB, and Form 3CD) have been merged into a single unified Form No. 26. This form features separate schedules for losses, depreciation, and computations, ensuring better alignment with the new Income Tax Return (ITR) framework.
7. Streamlined Foreign Remittance Compliance For foreign remittances made on or after April 1, 2026, the old Forms 15CA and 15CB have been replaced by Form No. 145 and Form No. 146 respectively. Form 145 introduces a simplified 4-part structure that eliminates duplicate reporting; for example, if an Assessing Officer’s certificate is already obtained (Part B), the CA certificate section (Part C) is no longer required.
8. Specified Methodologies for Perquisite Valuation The rules provide detailed frameworks for calculating the taxable value of perquisites offered by employers. For example, rent-free accommodation value is calculated based on fixed percentages (10%, 7.5%, or 5% of salary) tied to the city’s population according to the 2011 census. Similarly, the value of motor cars provided for partial personal use is fixed at specific amounts like ₹5,000 or ₹7,000, plus ₹3,000 if a chauffeur is provided.
9. Updated ITR Forms (ITR-1 to 7 and ITR-UN) The new rules dictate that income tax returns will continue to use the naming convention of ITR-1 (Sahaj) through ITR-7. However, for taxpayers who need to file an updated return (previously known as ITR-U), the rules introduce a new form called ITR-UN, which must be submitted electronically.
10. Mandatory Reporting for Stamp Paper Purchases The rules classify the purchase of stamp paper as a specified financial transaction that must be reported to the tax department. For individuals holding a PAN, purchases of ₹2,00,000 or more in a single transaction must be reported, whereas the threshold drops to ₹1,00,000 or more for individuals not possessing a PAN.
Refer Income Tax Rules 2026 PDF DOWNLOAD Notification ENGLISH AND HINDI