Form 40 Income Tax Rules 2026 pdf download and Key points

Last Updated on: April 24, 2026

Form 40 Income Tax Rules 2026 pdf download and Key points

FORM NO. 40
[See rule 74]
Exercise of option for relief from taxation in income from retirement benefit account maintained in a notified country under section 158 of the Act

Under the Income-tax Rules, 2026, Form No. 40 replaces the erstwhile Form 10EE. It is governed by Section 158 of the Income-tax Act, 2025 (which replaces the old Section 89A), and Rule 74 of the Income-tax Rules, 2026.

Here are all the key points regarding Form No. 40:

1. Purpose of the Form Form 40 is used by a resident Indian to exercise an option to claim tax relief for income accrued in a foreign retirement benefit account maintained in a “notified country” (presently including the USA, UK, Canada, and Australia). Exercising this option allows the taxpayer to defer the taxation of this income in India until the amount is actually withdrawn or redeemed in the foreign country, thereby preventing double taxation on an accrual basis.

2. Applicability (Who Should File) The form must be filed by a “specified person”, defined as a person resident in India who opened a retirement benefit account in a notified country while they were a resident of that country and a non-resident in India.

Condition: The option must be exercised for all such retirement benefit accounts maintained by the specified person in the notified country.

3. Irrevocability of the Option A critical rule regarding Form 40 is that the option, once exercised, is irrevocable. It cannot be withdrawn for the tax year in which it is exercised, and it will automatically apply to all subsequent tax years.

4. Frequency and Due Date

Due Date: The form must be filed electronically on or before the due date for furnishing the income tax return (ITR) under Section 263(1)(c) of the Income-tax Act, 2025, for the relevant tax year.
Mandatory Nature: Filing a valid Form 40 within the specified time limit is a strict mandatory condition for making an admissible claim for this tax relief.

5. Mode of Filing and Verification

Electronic Filing: Form 40 must be submitted online through the Income Tax e-Filing portal; offline filing is not permitted.
Verification: The specified person must make a self-declaration in Part B of the form and e-verify it using either a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC).
No Edits Allowed: Once the form is validly submitted and an acknowledgment is generated, it cannot be edited, so taxpayers must ensure all details are correct prior to final submission.
Mandatory PAN: The form cannot be submitted without a valid Permanent Account Number (PAN).

6. Structure of the Form The form is structured into two main parts:

Part A (Basic Details): Captures the specified person’s Name, Address, PAN, Email ID, Contact Number, and the relevant Tax Year.
Part B (Account Details & Declaration): Captures the details of all specified accounts maintained (including account numbers, the notified country, and account balances) and contains the formal declaration where the taxpayer exercises the irrevocable option.

7. Mandatory Documents (Annexures) Required To successfully file Form 40, the following documents must be attached as annexures:

Annexure A-1: A statement of the specified accounts showing the account numbers, the notified country, and the exact balance in the accounts as on the last date of the financial year prior to the tax year for which the form is submitted.
Annexure A-2: Documentary evidence (or relevant statutory provisions) demonstrating how the income from the specified account is taxed or is taxable in the notified country.
Annexure A-3: A computation of income for all prior tax years in which the income from the specified account was already included in the total income, along with a reconciliation statement matching this computation with the return of income for those years.

1: What is Form 40 ?
Ans: Form 40 is the prescribed form for exercise of option to claim the tax relief under section 158 of the Income-tax Act’ 2025 (“ITA 2025”) by a person resident in India, in respect of income from a retirement benefit account, maintained in a notified country. The countries notified for this purpose of this relief are USA, UK, Canada, and Australia, at present. On exercise of option, the Indian resident gets the relief from taxation of income on accrual basis in India, in case such income from retirement benefit account is taxed at the time of withdrawal or redemption in the notified country. In other words, filing of this Form allows for the deferral of taxation until the income is withdrawn or redeemed in the foreign country.
2: Who should file Form 40?
Ans: Any specified person (being a person resident in India, who had opened a retirement benefit account in a notified country, while being a resident of that country and non-resident in India), may, at his option, file Form 40 to claim the tax relief under Section 158 of ITA 2025. The option once exercised, cannot be revoked for that tax year, and it applies to all subsequent tax years. The option has to be exercised by the resident person for all such retirement benefit accounts maintained in the notified country.
3. Who is required to verify the Form 40?
Ans. The specified person, who intends to exercise the option for claiming the tax relief under section 158, is required to make a self-declaration in Part B of the Form 40, to the effect that he has exercised this option for all specified accounts maintained in the notified country. The details of all such specified accounts are required to be mentioned in the Row 3 of Part B. The specifiedperson is further required to affirm the condition that the option, once exercised for any tax year, cannot be withdrawn for that tax year or any subsequent year.
4: Where and how the Form 40 is required to be filed?
Ans: The Form 40 shall be filed electronically on the e-filing portal of Income-tax Department. The form shall be furnished electronically either under digital signature or through electronic verification code, duly verified by the specified person.
5: What is the time limit for filing Form 40?
Ans: The Form 40, for exercise of option for claiming tax relief under section 158 of the ITA’ 2025, is required to be filed electronically on or before such “due date” for filing return of income prescribed under section 263(1)(c) of the ITA’ 2025, as may apply for the specified person claiming the tax relief. This time limit is specified in the relevant rule.
6: What documents are required to file Form 40?
Ans: The following documents/details may be required while filing Form 40, –
 Specified Account or Foreign Retirement Account details – Account number(s), Date of account opening, Account balance at the end of the previous tax year.
 Name of the retirement fund and the notified country.
 Details of income already taxed in India in earlier years, if any.
 Copy of statement of the specified account having above details.
 Document showing how the income from specified account has been taxed or is taxable in the notified country including relevant statutory provision of the notified country or any other relevant document.
 Computation of income for all the tax years in which the income from specified account has already been included in the total income.
 A reconciliation statement of the computation of income with the return of income for the said tax years.
7. Is Form 40 mandatory?
Ans: Exercise of option by way of filing a valid Form 40 within the specified time limit, is a mandatory condition for making an admissible claim of tax relief under section 158, by the specified person, in respect of income from a retirement benefit account, maintained in a notified country. The option, however, once exercised for any tax year, shall continue to be valid for that tax year and all subsequent tax years.
8: Can I edit Form 40 after submission?
Ans: No. Once Form 40 is validly submitted, after self-declaration by the specified person, and acknowledgment is generated, it cannot be edited. Please ensure that all details are correct before final submission.
9: Do I need to attach any document with the Form 40?
Ans: The following documents are mandatory to be attached, as required at Serial Number 5 (Part B) of the Form EE, –
 Annexure A1- A copy of statement of the specified account having the details of account number, the notified country, and the account balance as on last date of the financial year prior to the tax year for which the option is exercised;
 Annexure A2- Documentary evidence to show how the income from specified account has been taxed or is taxable in the notified country. Relevant statutory provision of the notified country or any other relevant document may be attached.
 Annexure A3- The computation of income for all the tax years in which the income from specified account has already been included in the total income. The computation has to be reconciled with the return of income for the said tax years. A reconciliation
statement of the computation of income is to be attached.
10: While filling Part A and Part B, can I leave any field blank?
Ans:  PAN of the specified person is mandatory. Name and complete address thereof shall be pre-filled, which can be updated by the user.
 An updated Email address and Mobile number would ensure faster communication and verification; therefore it is recommended to provide it.
 Details of all specified accounts maintained in any notified country, in Row 3 of Part B may be provided, as applicable.
 Details of option exercised in Row 4 of Part B is a mandatory field.
11: What if the specified person exercising the option does not have a PAN?
Ans: Form 40 cannot be submitted without a valid PAN of the specified person exercising the option to claim the tax relief.
12: Can Form 40 be filed offline?
Ans: No. Form 40 can only be submitted online through the Income Tax e-Filing portal.
13: Why is Form 40 important?
Ans: Exercise of option by way of filing of a valid Form 40 within the specified time limit is a mandatory compliance for claiming tax relief by a specified person, in respect of income from a retirement benefit account, maintained in a notified country, under section 158 of the ITA’ 2025. However, the claim of tax relief is further subject to fulfillment of certain other eligibility conditions, as prescribed in the relevant rule.

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Form 40 Income Tax Rules 2026 pdf download and Key points

Form 40 Income Tax Rules 2026 pdf download and Key points

Form 40 Income Tax Rules 2026 pdf download

Form No.40– Frequently Asked Questions

Guidance Note on Form 40