New tax rulebook signals major compliance reset from April

February 19, 2026 Finance Talk Valli Sarvani

India’s tax administration is preparing for a structural overhaul.

The Income Tax Department has released draft Income-tax Rules, 2026, alongside new forms.

These rules will operationalise the Income-tax Act, 2025, from April 1, 2026. Moreover, authorities have opened the framework for stakeholder consultation.

The draft signals a shift toward simplified filing and standardised compliance.

However, the most striking reform is the sweeping renumbering of tax forms. This change affects individuals, businesses, and institutions alike.

From April 2026, familiar forms like 26AS, 16, and 13 will carry new numbers. Consequently, salaried employees and pensioners may face initial confusion.

According to tax experts, compliance for Tax Year 2026-27 onward will follow the revised numbering.

Both regimes may run in parallel during the transition. Therefore, applicability will depend on the relevant tax year. This approach aims to reduce disruption.

Businesses under tax audit will see consolidation. Earlier forms 3CA, 3CB, and 3CD will merge into a single Form 26. As a result, reporting may become more efficient.

Transfer pricing audit reports will move from Form 3CEB to Form 48. Meanwhile, companies under Minimum Alternate Tax will file Form 66 instead of 29B. Although obligations remain unchanged, firms must update internal systems.

TDS and TCS returns also receive new identifiers. Salary TDS returns shift from 24Q to 138. Resident and non-resident TDS forms become 140 and 144, respectively. TCS returns will now use Form 143.

Employer-issued TDS certificates, currently Form 16, will become Form 130. Hence, payroll software updates are essential.

For cross-border taxpayers, DTAA declarations change from 10F to 41. Tax Residency Certificate applications move to Form 42.

Foreign remittance filings and CA certificates will use Forms 145 and 146. Using outdated forms could delay remittances.

Charitable trusts face broader restructuring. Registration, audit, and donor reporting forms all receive new numbers. These updates strengthen donation traceability and automated checks.

The draft awaits parliamentary approval. Central Board of Direct Taxes Chairman Ravi Agrawal has indicated that updated rules and FAQs will follow.

Taxpayers should avoid old forms, upgrade compliance systems, and verify numbers on the e-filing portal. While structural, these changes demand precision in a data-driven tax regime.

Image from Pxhere (Free for commercial use / CC0 Public Domain)

Image Published on April 02, 2017