New Income Tax Rules Draft Released, Check Key Provisions and Taxpayer Impact

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New Income Tax Act: The Income Tax Department has unveiled the draft Income Tax Rules for 2026. This will establish a comprehensive framework for the ‘New Income Tax Act, 2025’, set to take effect on April 1, 2026. This is the most significant shift in India’s direct tax landscape, aimed at simplifying tax regulations and minimizing legal conflicts. The government has opened these rules for public discussion, allowing taxpayers and professionals to prepare ahead and share their feedback by February 22.

This proposed framework will replace the 1962 rules that have been in effect for the last sixty years. A key highlight of the new rules is the reduction of the previous 511 rules down to just 323, making the entire system easier to understand and more concise. The government is working to modernize tax administration and simplify the language to avoid confusion during tax filing.

Tax forms have also been revamped under the new rules, featuring smart design elements like automated reconciliation and pre-fill options. This technological integration aims to minimize human errors during tax filing, enhance the taxpayer experience, and boost the efficiency of the processing system.

Clarity will be provided on these key areas

The draft rules offer operational clarity on various practical matters, such as determining the fair market value of assets, calculating the holding period for capital assets, and introducing a new simplified income tax return (ITR) format. These procedural clarifications are vital, as most disputes historically stemmed from unclear rules.

However, these draft rules are still in the works. Necessary changes will be made based on input from tax professionals, industry groups, and corporations. Once finalized, these rules will take effect alongside the new Income Tax Act on April 1, 2026. The new ITR forms are also expected to be released soon.

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About the Author

Sweta Mitra

Working in the media for last 7 years. The journey started in the year 2018. For the past few years, my working experience has been in Bengali media. Currently working at Timesbull.com. Here I write like Business, National, and Utility News. My favorite hobbies are listening to music, traveling, food,...

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SwetaMitra@timesbull.com Author at TimesBull TimesBull
Working in the media for last 7 years. The journey started in the year 2018. For the past few years, my working experience has been in Bengali media. Currently working at Timesbull.com. Here I write like Business, National, and Utility News. My favorite hobbies are listening to music, traveling, food, and books. For feedback - timesbull@gmail.com
Sweta Mitra - Author at TimesBull
About the Author

Sweta Mitra

Sweta Mitra - Author at TimesBull

Working in the media for last 7 years. The journey started in the year 2018. For the past few years, my working experience has been in Bengali media. Currently working at Timesbull.com. Here I write like Business, National, and Utility News. My favorite hobbies are listening to music, traveling, food,...

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