The draft Income-tax Rules and Forms put out for public consultation propose a major redesign of 30 high-volume tax forms, including PAN applications, non-PAN declarations and TDS non-deduction forms, which together account for over 30 crore filings annually, according to sources in the Central Board of Direct Taxes (CBDT).
These high-volume forms also include key business-related forms such as tax audit reports and foreign remittance forms. Sources said the focus of the exercise was to reduce duplication, simplify reporting and make forms compatible with a data-driven tax administration system.
One of the biggest changes relates to non-PAN declarations. Earlier, individuals without PAN had to file Form 60 for as many as 21 different types of transactions, and that too separately for each bank or financial institution. Nearly 13 crore such declarations were filed every year, many of them manually, even when transaction data was already available through banking systems or digital payments, as per CBDT sources.
Where information is already available through banks or digital platforms, filing of multiple Form 60 will no longer be required. As a result, filings are expected to fall by 9–10 crore per year, significantly cutting paperwork for both taxpayers and banks.
The department has also simplified PAN application procedures. Earlier, PAN applications were processed through Forms 49A and 49AA, which were long and followed a one-size-fits-all approach. With nearly 5 crore applications being filed annually, even small inefficiencies created a heavy compliance burden. Under the new rules, PAN forms have been split based on individual and non-individual applicants, with fields reduced from 18 to 14 and sub-fields from 47 to 20, making the process faster and more user-friendly.
Another key reform targets business compliance and litigation reduction. Businesses earlier submitted audit details in Form 3CD, which often did not align fully with income-tax return formats. Even minor mismatches could lead to notices, additions and disputes. Under the revised rules, the new tax audit report format (Form 26) has been aligned with the income-tax return, and audit data will be auto-populated wherever possible. Officials said this would reduce duplication, minimise errors and help prevent avoidable disputes.
To reduce common taxpayer errors, the department has also merged Forms 15G and 15H, which were used by depositors and senior citizens to avoid TDS on interest income. Wrong selection of the form was common and led to rejections and follow-ups. Under the revised rules, a single intelligent form will replace both, with the system determining eligibility automatically. Data entry fields have been reduced by around 42 per cent, easing compliance particularly for senior citizens.
The reforms also aim to help very senior citizens aged 75 years and above, for whom return filing can be burdensome. Form 12BBA has been simplified into a basic authorisation form, allowing eligible seniors to authorise banks to compute and deduct tax. Fields have been reduced by about 46 per cent, and many such taxpayers may no longer need to file returns, sources said.
For businesses and start-ups, the new forms will also incorporate dynamic logic. Irrelevant fields will automatically remain hidden, ensuring that a start-up is not required to answer questions meant for sectors such as mining or manufacturing. Officials said data entry in key business forms has fallen by 40–46 per cent, improving ease of compliance without weakening reporting standards.
“The focus on simplification of the IT forms is a welcome step, in line with the government’s focus on simplification of the tax regime. While a significant number of redundant fields in the forms are proposed to be removed, the data otherwise to be entered into the form remains at similar levels,” an tax expert said.
“There will not be a significant reduction in the effort of the taxpayer in filing the form. It is desired that the forms should be remodelled to optimise information asked for, and suitable clarifications should be issued about what the taxpayer should fill in the respective fields,” he added.
The upcoming compliance overhaul would impact not just corporates but also ordinary taxpayers, tax professionals, senior citizens, small businesses and cross-border transactions ahead of the Income-tax Act, 2025 rollout from April 1, 2026, they said.
The rewrite of the Income-tax Rules and Forms was carried out within the tax department, with over 150 officers reviewing each rule and form line by line. The department also held consultations with taxpayers, professionals, businesses, auditors and reporting entities, officials said.
