📜 Introduction: Draft Rules for New Income Tax Act Released

The Central Board of Direct Taxes (CBDT) has released the draft Income Tax Rules, 2026 along with associated forms to implement the New Income Tax Act, 2025, which is scheduled to come into force from 1 april 2026.

These draft rules replace the decades‑old Income Tax Rules, 1962 and provide operational details needed to put the new law into effect.

🗓️ Public Feedback Open: Deadline and Process

The draft rules and forms have been placed in the public domain for consultation. Citizens, tax professionals, industry bodies, and other stakeholders can review and submit comments until 22 February 2026.

Feedback can be submitted through a utility on the official income tax e‑filing portal, where users enter their details and verify via an OTP to send suggestions.

📉 Objectives of the Draft Rules

Simplification and Modernisation

A key goal is to streamline and simplify the rules and forms, making compliance easier for both individual and corporate taxpayers.

The total number of rules is reduced dramatically from 511 to 333.

The total number of tax forms is cut down from 399 to 190.
This consolidation aims to reduce redundancy and clarity issues under the older regime.

Enhanced Usability

The draft forms feature smart capabilities such as automated reconciliation and prefilling of data, which helps reduce errors and makes filing more intuitive.

Language across rules and forms has also been simplified to reduce ambiguity and facilitate smoother interpretation.

🧑‍💼 Stakeholder Engagement: What Feedback Is Sought

The CBDT has specifically invited suggestions in four broad categories:

Simplification of Language – making provisions easier to understand.

Reduction of Litigation – amending ambiguous clauses that may result in disputes.

Reduction of Compliance Burden – lowering procedural or documentation requirements.

Identification of Redundant/Obsolete Rules – removing outdated requirements.

Stakeholders are asked to clearly identify the relevant provisions, forms, or sub‑rules when giving feedback.

📌 Key Expected Features of the New Rules

Operational and Procedural Guidance

The draft rules address numerous practical aspects, including:

Determining the period of holding for capital assets for tax purposes.

Guidelines for zero‑coupon bonds taxation.

Procedures for infrastructure entity applications under specified tax provisions.

Continued Structure for ITR Forms

Although streamlined, the new rules retain the broad ITR‑1 to ITR‑7 structure, albeit with tighter eligibility conditions and clearer boundaries for each form category.

💡 Why This Matters

The release of the draft rules is an important milestone in operationalising the New Income Tax Act 2025, moving India’s tax system toward greater clarity, transparency, and ease of compliance.

The participatory approach—inviting public feedback—is also intended to result in more practical and inclusive rule‑making, allowing taxpayers to influence the final shape of tax procedures.

🏁 Next Steps

After the public consultation period ends on 22 february 2026, the CBDT will review the feedback, refine the rules and forms as necessary, and proceed toward official notification before the Act’s effective date of 1 april 2026.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.