Streamlined Compliance and New Requirements from April 1, 2026

With the new Income-tax Act, 2025, coming into force from April 1, 2026, the Central Board of Direct Taxes (CBDT) has introduced a new set of Income-tax Rules, 2026, to ensure alignment. These comprehensive rules bring forth a series of changes across forms, disclosures, and deductions, impacting both salaried employees and the broader tax landscape.

A notable aspect of these new rules is the focus on easing compliance, evidenced by a significant reduction in the number of forms, from 399 down to 190. However, certain provisions, such as those related to TDS and advance tax, will have immediate operational impact, despite the primary income filings for FY 2026-27 being due in FY 2027-28.

Key Highlights of the New Rules:

• HRA Claims: Employees claiming House Rent Allowance (HRA) will now be required to furnish landlord details if the aggregate rent paid during the tax year exceeds Rs 1 lakh. The Permanent Account Number (PAN) of the landlord becomes mandatory in such cases.
• 'Tax Year' Concept: The new Act introduces the concept of a 'tax year' as a 12-month period starting from April 1, replacing the existing term of 'assessment year'.
• Retrospective Amendments: A retrospective amendment from April 1, 2021, clarifies that electronically granted approvals in assessment proceedings cannot be invalidated due to technical defects.

Tax experts suggest that with higher allowance thresholds and streamlined deductions, the old tax regime might offer potential advantages, especially for middle-income salaried earners, compared to the new tax regime under Section 202 of the I-T Act, 2025 (formerly Section 115BAC of I-T Act, 1961).