Income Tax Department Releases Draft Rules for New 2025 Act, Invites Public Feedback
The Income Tax Department has taken a significant step forward by issuing comprehensive draft rules and forms under the newly enacted Income Tax Act, 2025. This landmark legislation is designed to overhaul the tax framework, with core objectives focused on simplifying provisions, substantially reducing compliance burdens, and making the entire system more accessible and taxpayer-friendly. The Income Tax Act, 2025, is set to officially replace the over sixty-year-old Income Tax Act of 1961, with its provisions scheduled to take effect from April 1, 2025.
Immediate Action Required from Taxpayers and Stakeholders
Through this latest release, the Income Tax department has formally opened a channel for feedback, inviting all stakeholders to review and comment on the draft Income-tax Rules, 2026. The department has issued a clear and urgent call to action, urging all stakeholders, including taxpayers, tax professionals, industry bodies, and the general public, to meticulously examine the draft rules and forms and provide their constructive feedback.
Critical Deadline for Feedback Submission
The draft rules and forms will be available for public scrutiny and comment for a strict 15-day period from their date of release. According to the official announcement, the dedicated feedback portal will remain open for submissions until February 22, 2026. The I-T Department explicitly stated, "The draft rules and forms shall remain in public domain for a period of 15 days i.e. up to 22 February 2026." This window provides a crucial opportunity for public participation in shaping the final regulations.
Key Structural Changes and Simplifications in the New Draft
The proposed changes represent a major structural simplification. The existing Income-tax Rules, 1962, consist of a complex web of 511 rules and 399 forms. The new draft Income-tax Rules, 2026, propose a streamlined framework with just 333 rules and 190 forms. This reduction of approximately 35% in rules and over 50% in forms has been achieved by systematically removing redundancies, consolidating overlapping provisions, and eliminating obsolete requirements.
In terms of the new income tax forms, the department has undertaken extensive simplification to enhance ease of use for taxpayers. A key feature is the standardization of common information across different forms, which is expected to significantly reduce the compliance burden. The forms have been intelligently redesigned to incorporate automated reconciliation features and prefill capabilities. This smart design aims to make the filing process more intuitive, less error-prone, and considerably enhance the overall user experience.
Furthermore, the language used in the forms has been simplified to eliminate operational, administrative, and legal ambiguities, ensuring greater clarity for all users. The overarching goal of these rule changes is to simplify provisions, making them easier for taxpayers to understand and comply with. The department asserts that these proposed process simplifications will tangibly enhance the ease of living and doing business for every taxpayer in the country.
Additional Support Tools Provided by the IT Department
To facilitate a smooth transition and help stakeholders navigate the changes, the Income Tax Department has provided two essential navigator tools alongside the draft rules and forms:
- A navigator that clearly maps the old rules from the 1962 Act to the corresponding new draft rules under the 2026 framework.
- A second navigator that provides a detailed mapping of the old forms to the newly proposed, simplified forms.
These tools are intended to guide stakeholders and the public through the comparative analysis of the old and new systems, ensuring a comprehensive understanding of the proposed transformations.
