Government Invites Stakeholder Input on New Income Tax Rules

The Income-tax Act, 2025, has received approval from the President and will start on April 1, 2026. This new law is designed to replace the old Income Tax Act, 1961, which has been in place for over sixty years. The government has emphasized the importance of creating a clear and easy-to-understand tax law that reduces confusion and makes compliance simpler. Before the law officially begins, the government, through the Central Board of Direct Taxes, or CBDT, is inviting suggestions from people and organizations affected by the new rules. The goal is to gather feedback to improve the proposed income tax rules and forms. The draft rules and forms are available on the official website of the Income Tax Department. Stakeholders are encouraged to review these documents carefully and give their suggestions before the rules are finalized and officially notified. The CBDT has asked for input in four specific areas. First, it wants suggestions on simplifying the language used in the rules to make them easier for everyone to understand. Second, it seeks ideas on reducing legal disputes, which can happen when rules are unclear or misunderstood. Third, the government is interested in ways to lessen the burden of compliance, making it easier and less time-consuming for taxpayers to follow the rules. Finally, it wants stakeholders to identify any rules or forms that are no longer necessary or are outdated. To facilitate this process, a special tool has been launched on the e-filing portal. This online platform is accessible to all stakeholders from February 4, 2026. Users can submit their suggestions by entering their name and mobile number, followed by a verification process using an OTP. When giving suggestions, people are asked to specify exactly which rule or form they are referring to, including the specific number or sub-rule. The existing Income-tax Rules from 1962 contain 511 rules and 399 forms. Under the proposed draft for 2026, there are 333 rules and 190 forms. This reduction shows that the government is working to remove outdated or redundant rules and consolidate the remaining ones for clarity. The move to change the law was announced as part of the budget of July 2024. The government plans a thorough review of the old law to make the new one shorter, clearer, and easier to read and understand. This effort aims to help taxpayers, tax professionals, and officials to better understand their rights and responsibilities. As of February 2026, there is no official confirmation on when the final rules and forms will be officially notified or come into effect. The government is still in the process of gathering and reviewing feedback from stakeholders. This review and update process is an important part of the government's efforts to modernize the tax system and bring it in line with current needs. It highlights the importance of stakeholder participation in shaping laws that affect many aspects of economic life. Stakeholders are urged to participate actively by reviewing the proposed rules and submitting their suggestions before the final notification. This collaborative approach aims to create a more transparent, efficient, and user-friendly tax environment in the country.