New Delhi. The most important change is going to happen in the Income Tax Regime from April 1st. To simplify the Income Tax Return process, Form 16 is also being reduced to half the pages as before. Under this change, income tax rules will be reduced from 511 to 333. While the number of tax forms will reduce from 399 to 190. The Central Board of Direct Taxes (CBDT) has said that the Income Tax Rules-2026 and forms will be notified by the first week of March, but before that suggestions have been sought from the common people and experts.
New rules will come into effect from April 1st
These have been made according to the Income Tax Act 2025, which will come into effect from April 1. Under the new system, the ITR form will be filled in advance. While filling the form, the taxpayer has to check whether any amendment needs to be made. If the taxpayer feels that the information given in the form is incomplete or any change is required, then he will be able to amend it and submit it online.
According to sources, in the new structure, changes to additional benefits received from job will be applicable in both the old and new tax systems. This will provide relief to all types of taxpayers. The draft rules and forms will be publicly available for 15 days (February 22). During this period, common people and experts can give their opinions and suggestions.
Efforts to make the process transparent and effective:
The department says that this will make the rule making process more transparent and effective. The language of the new rules has been simplified. To increase understanding, formulas and tables have been added at many places and unnecessary repetitions present in the old rules have been removed. Tax forms have also been simplified, thereby reducing the burden on taxpayers. The same information has been made standard in all the forms, so that there is no need to fill the information again and again. The new smart form will have the facility of automatic matching and filling of information.
Objective: To increase the number of taxpayers:
A senior CBDT official says that the main objective of the new laws and rules is to increase the number of people paying taxes and to make the process of filing taxes easier. At present, about 9 crore people in the country file income tax returns, while about 12 crore people file taxes through different methods. This shows that many people are still not filing returns regularly. Therefore, our aim is to gradually connect more people with return filing. This is why the form has been made easier in the new system.
Separate TDS form with zero TDS and salary:
The numbering of many forms to TDS has also been changed. Now the application for reduced or zero TDS will be made in Form 128, while the TDS certificate to salary will now be called Form 130. Along with this, the old forms of TDS return 24Q, 26Q and 27Q have also been given a new number.
Annual Tax Statement i.e. 26AS will now be known as Form 168: Annual Tax Statement, commonly known as Form 26AS, will now be known as Form 168. Similarly, Form 61A giving information about financial transactions will now become Form 165. Along with this, changes have also been made in the forms to sending money abroad.
Added audit and international tax forms
Many commonly used audit and international tax forms have been combined or renumbered. Now the tax audit report, which was earlier filled in forms 3CA, 3CB and 3CD, will now be given in a single Form 26. The audit report to transfer pricing will now be given in Form 48 instead of Form 3CEB. At the same time, the certificate to Minimum Alternate Tax (MAT) will now be submitted in Form 66 instead of Form 29B. For tax residency certificate, Form 42 will have to be used instead of Form 10FA.
New form template also released along with draft
New form templates have also been released with this draft. Experts say that the old form numbers being used till now had become quite complex after changing over the decades. The new numbering will reduce confusion while filing taxes. With the new system, tax information can be better linked with the digital system. This will help in real-time data matching and checking. However, due to this, employers, tax advisors, registrars and companies will have to make quick changes to their systems.
Three more cities including Bengaluru in HRA category-1
The draft rules expand the list of Tier-1 metros for the purpose of claiming house rent allowance to include Bengaluru, Pune, Ahmedabad and Hyderabad. This list includes Delhi, Mumbai, Kolkata and Chennai. The draft also proposes to make it mandatory for crypto exchanges to share information with the tax department. Central bank digital currency has also been included as an accepted method of electronic payment. The draft rules also propose detailed reporting and due diligence responsibilities for crypto-asset service providers.
