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The Income Tax Department released draft Income-tax Rules, 2026 for stakeholder consultation, aiming to simplify compliance and modernise tax administration from April 1, 2026.
The Income Tax Department released draft Income-tax Rules, 2026 for stakeholder consultation, aiming to simplify compliance and modernise tax administration from April 1, 2026.
The Income Tax Department has released the draft Income-tax Rules, 2026, laying out the detailed procedural framework for implementing the Income-tax Act, 2025, from April 1, 2026. The move marks a key milestone in India’s largest direct-tax overhaul, aimed at simplifying compliance and reducing litigation.
The draft rules and proposed forms have been placed in the public domain for stakeholder consultation until February 22, 2026, giving taxpayers, professionals and industry bodies time to prepare ahead of the new law’s rollout.
“We all remember that on Budget Day, the Hon’ble Finance Minister had clearly stated that the new Income-Tax Forms and Rules would be released soon, so that taxpayers and professionals are not caught unprepared ahead of the new Act,” said Himank Singla, Founding Partner at SBHS & Co., talking to Money Control. “With the Act scheduled to come into force from April 1, 2026, the government has now taken an important step by releasing the draft rules and forms for consultation.”
While the new Act sets out the legal framework, the draft rules explain how it will work in practice covering aspects such as valuation norms, filing formats and procedural requirements for taxpayers, professionals and tax authorities.
According to Pratibha Goyal, a New Delhi–based chartered accountant, the draft rules significantly simplify the system. “The Income-tax Act, 1961 contained 511 rules. These have now been reduced to 323, making the new Act far simpler and easier to understand,” she said.
Once finalised, the Income-tax Rules, 2026 will replace the Income-tax Rules, 1962, which have governed tax administration alongside the 1961 Act for more than six decades. The government says the objective is to modernise tax administration and make the law easier to interpret and apply.
Singla noted that the drafting philosophy mirrors the intent of the new Act. “The focus is on simplification, removal of redundancy and better readability. The draft rules use simpler language, supported by tables and formulas, so that compliance becomes more objective and less interpretational,” he said.
On the compliance front, the draft income-tax return (ITR) forms have also been rationalised. The government has indicated that forms will be standardised across categories and redesigned with features such as automated reconciliation, pre-filled data and technology-driven processing.
“This is expected to reduce errors, improve taxpayer experience and enhance the efficiency of centralised processing systems,” Singla added.
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February 07, 2026, 19:58 IST
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