New Delhi, February 7 The tax department released draft rules and forms under the new Income Tax Act, 2025, on Saturday. This act aims to simplify the provisions and reduce the compliance burden, making it easier for taxpayers to understand and comply with.
A new and simplified Income Tax Act, 2025, will come into effect from April 1. This act will replace the over six-decade-old Income Tax Act of 1961.
The Income Tax department has requested stakeholders to provide comments on the draft Income-tax Rules, 2026, and forms by February 22. Subsequently, the rules and forms under the new Act will be notified.
The Income-tax Rules, 1962 contain 511 rules and 399 forms. As a result of the changes proposed in the new rules and forms, including the removal of redundancy and consolidation of rules wherever possible, the draft Income-tax Rules, 2026 contain 333 rules and 190 forms, the I-T department said while inviting stakeholder comments.
Regarding the new income tax forms, the department stated that they have been simplified to a large extent to make them easier for taxpayers to use. Standardisation of common information has been done across the forms to reduce the compliance burden for taxpayers.
"The forms have been designed in a smart way to provide for automated reconciliation and also prefill capabilities so as to make filing more intuitive and less error-prone. These smart forms would considerably ease the filing and enhance the user experience," the department said.
The language of the forms has also been simplified to avoid any operational, administrative, or legal ambiguity, it added.
The rationalisations carried out in the rules are expected to simplify the provisions, which will help in ease of understanding and comprehension. The proposed process simplifications will help in ease of living and general ease of business across all sections of taxpayers, the tax department said.
Along with the new draft rules and forms, two guides are also provided for the guidance of stakeholders and the public. One guide provides the mapping of the old rules and the new draft rules, and the second guide provides the mapping of the old forms and the new draft forms.
Nangia Global Partner Sandeepp Jhunjhunwala said that what is noteworthy is the long-overdue rationalisation of archaic perquisite thresholds, such as tax-free at-work meal value, gift received from employer, etc. - a reform that has been widely sought and brings the income tax framework closer in line with contemporary economic realities.
"Together, these measures signal a thoughtful and forward-looking approach to legislative implementation," he said.
Jhunjhunwala further said that a marked difference also appears to have been made in the definition of Accountant for the purpose of various certification under the new Income Tax Act, which now stands revised to individual professionals with not less than 10 years of experience and annual receipts in the year preceding certification to be more than Rs 50 lakhs.
For Partners, if any entity engaged in rendering accountancy or valuation services has annual receipts in the year preceding certification that exceed Rs 3 crore.
Grant Thornton Bharat LLP Partner Tax Richa Sawhney said that the focus on technology in ensuring the forms are pre-filled and reconciled will reduce the time spent in compliance and reduce inadvertent errors.