From April 1, India will implement the Income-tax Rules, 2026, replacing the six-decade-old framework under the 1962 rules. The government says the changes are designed to make tax compliance simpler, more digital, and more predictable.
According to an tax expert, one of the key shifts is the introduction of pre-filled income tax returns, where most reportable income will automatically appear on the portal using data from banks, employers, mutual funds, and other reporting entities.
He adds that taxpayers will mainly need to review, verify, and correct this information rather than enter it manually.
Form 16 will also be updated to provide a detailed breakdown of salary, including allowances, perquisites, exemptions, ESOPs, and other taxable benefits. “This closer alignment with AIS and Form 26AS should reduce mismatches and improve transparency,” he said.
The rules also clarify several longstanding grey areas.
Revised Leave Travel Concession (LTC) guidelines set mode-wise limits for eligible travel costs and stronger documentation requirements.
Valuation methods for shares, property, jewelry, and other assets, as well as holding periods and cost calculations, are also being clarified to reduce disputes and litigation, he notes.
Finally, updated rules and forms for advance tax, TDS, and related compliances are expected to be notified before April, supporting a more automated and standardized income-tax system, he said.
In short, from April 1, taxpayers can expect simpler, pre-filled filings, clearer rules on benefits and assets, and greater consistency in compliance under the new regime.
