The Central Board of Direct Taxes (CBDT) has notified the Income-tax (Fourth Amendment) Rules, 2026, vide Notification No. 120/2026 dated September 17, 2026, further amending the Income-tax Rules, 2026. The amendments have been made in exercise of the powers conferred under Section 533 read with Sections 262, 273, 413, 514 and 515 of the Income-tax Act, 2025.
Amendments partly effective retrospectively from 1 April 2026
The Notification provides a two-stage commencement mechanism. Rules 2 to 4 of the Amendment Rules shall be deemed to have come into force from 1 April 2026, whereas Rules 5 to 8 shall come into force from the date of publication in the Official Gazette, i.e. 17 September 2026.
Electronic communication to replace requirement of affixing digital signature under Rule 176
A significant procedural amendment has been made in Rule 176(3)(a)(ii) of the Income-tax Rules, 2026. The words “by affixing digital signature” have been substituted with “by way of an electronic communication”. The change broadens the prescribed mode from a specific digital-signature requirement to electronic communication as contemplated under the amended provision.
Arrest and detention in prison deleted as modes of recovery of tax arrears under Rule 225
In a significant change to the manner in which tax arrears can be enforced, CBDT has deleted arrest of a tax defaulter and detention in prison as modes of recovery under Rule 225 of the Income-tax Rules, 2026. Clause (c) of Rule 225(4), which listed arrest and detention in prison as a recovery measure, has been omitted, along with the subsequent procedural sub-rules governing such arrest and detention. Consequentially, the words “(except arrest and detention)” have been removed from Rule 225(87), the provision dealing with police assistance.
Tax authorities may continue to use the other prescribed modes of recovery, including attachment and sale of movable and immovable property of the defaulter and appointment of a receiver for the management of the defaulter’s property. The amendment does not, by itself, abolish any separate power of arrest that may exist elsewhere under the Income-tax Act, 2025.
CBDT has also carried out certain corrective and rationalisation amendments in Rules 160 and 225. In Rule 160(3) and Rule 160(4), the reference “(i)” has been substituted with “(a)”. Rule 225 has further been amended to correct certain expressions and cross-references consequent to the deletions noted above.
Specified dates under Rules 246 and 256 extended from 30 September 2026 to 31 March 2027
The Amendment Rules provide an important extension of time under Rule 246(4) and Rule 256(4). In both provisions, the existing date of “30th September, 2026” has been substituted with “31st March, 2027”, thereby providing an additional six months in respect of the timelines governed by these provisions.
Form No. 169 substituted — new application framework for registration as Valuer
CBDT has substituted Form No. 169, prescribed under Rules 246 and 247, for making an application for registration as a Valuer under Section 514 of the Income-tax Act, 2025. The revised form seeks structured information relating to the applicant’s personal details, PAN, address, class of asset for which registration is sought, educational qualifications, previous employment, professional practice and valuation experience.
The revised Form No. 169 also requires a declaration regarding disqualification under Rule 247 and contains a detailed verification and declaration by the Valuer, including commitments to make an impartial and true valuation, furnish the valuation report in the prescribed form, charge fees within the rates prescribed by the Board and not undertake valuation of assets in which the Valuer has a direct or indirect interest.
The Form recognises 11 classes of assets, including immovable property, agricultural land, plantations, forests, mines and quarries, securities and business assets, machinery and plant, jewellery, works of art and other assets. Applicants are required to furnish particulars of valuation work undertaken, including assets valued or assignments undertaken during the previous three years, thereby bringing Valuers under a considerably more detailed disclosure and conflict-of-interest regime. A separate Form is required for registration for each different class of asset. The application is required to be accompanied by a fee of ₹10,000, while no such fee is required from valuers already registered under the Wealth-tax Act, 1957. Certain information in the form may also be pre-filled to the extent possible.
Form No. 171 revamped for registration of Authorised Income-tax Practitioners
The CBDT has also substituted Form No. 171, prescribed under Rules 256 and 257, for registration as an Authorised Income-tax Practitioner under Section 515 of the Income-tax Act, 2025. The revised form captures personal and professional details of the applicant, including PAN, residential addresses, contact details, principal place of profession in India and, where applicable, details of the firm in which the applicant is a partner.
Applicants are also required to provide details of prescribed educational qualifications and indicate whether they were already registered as authorised income-tax practitioners under the Income-tax Act, 1961. The form specifically seeks information relating to any disqualification under Section 515(4), (5) or (7) of the Income-tax Act, 2025.
The applicant is further required to certify that he or she has been practising before income-tax authorities for not less than one year and has not made another application under the Income-tax Act, 2025 for registration as an authorised income-tax practitioner before any other Chief Commissioner or Commissioner of Income-tax. Prescribed supporting documents are to be furnished as annexures, and some information in the form may be pre-filled to the extent possible.
The Notification can be accessed at: https://www.incometaxindia.gov.in/documents/d/guest/notification-no-120-2026-pdf
