New Income-tax Rules 2026: How Filing Returns Will Change for Taxpayers

India’s income tax framework is heading for a significant transformation starting April 1, 2026, as the Income Tax Department released the draft Income-tax Rules, 2026, along with draft income tax return (ITR) forms. These drafts offer the first detailed glimpse into how the new Income-tax Act, 2025 will function in real-world tax filing and compliance.

The department has opened the drafts for public comments for 15 days, until February 22, 2026, inviting feedback from taxpayers, tax professionals and industry bodies.

According to officials, the consultation process is intended to make the rule-making exercise more participative, transparent and practical.

A Key Step Towards the New Tax Regime

Rules and Forms to Shape Day-to-Day Tax Compliance

The release of draft rules marks a crucial milestone in the transition to the new income tax law. While the Income-tax Act, 2025 lays down the broad legal structure, the rules and return forms determine how taxpayers will actually compute income, disclose details and file returns.

According to the tax department, the redesigned framework is built around four core objectives:

• Simpler tax compliance

• Reduced ambiguity in interpretation

• Greater use of technology

• Lower compliance burden on taxpayers

Officials have said the changes are aimed at making tax filing easier to understand, quicker to complete and more efficient for both individuals and businesses.

Smarter Tax Forms and Expanded Pre-Filled Data

ITR Forms Get a Complete Overhaul

One of the most significant changes proposed is the complete redesign of income tax return forms. The department plans to convert ITRs into “smart forms”, using advanced technology to improve accuracy and reduce manual effort.

Key features of the proposed forms include:

• Increased use of pre-filled information

• Automated data matching across disclosures

• Centralised processing of returns

• Standardised common fields across multiple ITRs

This standardisation means taxpayers will no longer need to enter the same details repeatedly across different sections of the return.

Impact on Salaried Individuals and Businesses

For salaried taxpayers and small income earners, the move could result in cleaner, more accurate pre-filled returns, reducing errors and mismatches. For businesses and professionals, it may lead to fewer follow-up notices and faster assessments, cutting down long compliance cycles.

The stronger technology push is also expected to support data-driven tax administration, improve taxpayer services and significantly reduce manual intervention.

Simpler Language and Clearer Instructions

Making Tax Rules Easier to Understand

Another major focus of the draft rules is simplification of language. The department has rewritten instructions and explanatory notes using clearer, more accessible wording to reduce operational and legal confusion.

Officials believe this will help taxpayers better understand their obligations while improving ease of living for individuals and ease of doing business for companies.

To support the transition, the Income Tax Department has released two navigators:

• One mapping old rules to the new draft rules

• Another linking existing ITR forms to the proposed new forms

Feedback is being collected rule-wise and form-wise, allowing suggestions to be reviewed in a structured and systematic manner.

Cleaning Up Outdated Tax Provisions

Experts See Long-Awaited Modernisation

Tax experts say the draft rules represent a long-overdue effort to remove outdated provisions that no longer align with today’s digital and economic realities.

Several trends stand out across the proposed ITR forms:

• Electronic filing becoming the default mode

• More clearly defined simplified return categories

• Expansion of structured and detailed disclosures

• Greater reliance on digital data reporting

While compliance may become more data-intensive, experts note that clarity and consistency could reduce disputes in the long run.

What Taxpayers Should Do Next

Public Feedback Window Open Until February 22, 2026

The government has stressed that the draft rules and forms are not final. Taxpayers and professionals have time until February 22, 2026 to carefully review the proposals and flag practical challenges.

When the new law comes into force on April 1, 2026, ITR form numbers may still appear familiar. However, eligibility criteria, income reporting methods and filing processes are expected to change in noticeable ways.

The feedback received over the next few weeks will play a critical role in shaping the final version of India’s new income tax framework.

Conclusion

The release of the draft Income-tax Rules, 2026 and redesigned ITR forms signals a decisive shift towards a simpler, technology-driven and more transparent tax system. With smarter forms, clearer language and greater use of pre-filled data, the proposed framework aims to reduce compliance stress while improving efficiency. As India prepares for the new Income-tax Act to take effect from April 1, 2026, taxpayer feedback will be crucial in ensuring that the final rules strike the right balance between compliance, clarity and convenience.