{"id":3115,"date":"2026-03-23T13:24:57","date_gmt":"2026-03-23T07:54:57","guid":{"rendered":"https:\/\/www.sgcms.com\/regulatory-updates\/?p=3115"},"modified":"2026-03-30T17:24:07","modified_gmt":"2026-03-30T11:54:07","slug":"income-tax-rules-2026","status":"publish","type":"post","link":"https:\/\/www.sgcms.com\/regulatory-updates\/income-tax-rules-2026\/","title":{"rendered":"Income Tax Rules, 2026"},"content":{"rendered":"

The Central Board of Direct Taxes (CBDT), under the Ministry of Finance, issued a landmark\u00a0Gazette Notification on March 20, 2026<\/strong>, formally establishing the\u00a0Income-tax Rules, 2026<\/strong>. These rules are enacted under Section 533 of the new\u00a0Income-tax Act, 2025 (Act No. 30 of 2025)<\/strong>, which replaces the Income-tax Act, 1961, and will come into\u00a0force on April 1, 2026<\/strong>.<\/p>\n

Changes That Affect Everyone<\/h3>\n

These changes cut across every category of taxpayer \u2014 salaried, self-employed, investor, business owner. Read this part first before jumping to your specific section.<\/p>\n\n\n\n\n\n\n\n
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What’s changed<\/strong><\/p>\n<\/td>\n

Under the old Act (1961)<\/strong><\/td>\n\n

Under the new Act (2025)<\/strong><\/p>\n<\/td>\n<\/tr>\n

Core terminology<\/strong><\/td>\n“Previous Year” and “Assessment Year” were two separate, distinct concepts<\/td>\nReplaced by a single Tax Year (e.g., Tax Year 2026-27)<\/td>\n<\/tr>\n
Revised ITR filing window<\/strong><\/td>\n9 months from the end of the relevant year<\/td>\nExtended to 12 months from the end of the Tax Year<\/td>\n<\/tr>\n
Investigative digital access<\/strong><\/td>\nRestricted to physical records and a narrow set of digital assets<\/td>\nAuthorities can now access emails, cloud drives, social media, and digital trading accounts<\/td>\n<\/tr>\n
Crypto \/ VDA assets<\/strong><\/td>\nCovered loosely under existing provisions, without an explicit definition<\/td>\nFormally defined and addressed under dedicated provisions<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/h3>\n

For HR, Payroll Teams, and Business Owners<\/h3>\n

Forms \u2014 the new names<\/h4>\n

Every form has either been renamed or redesigned.<\/p>\n\n\n\n\n\n\n\n
\n

Old form (1961 Act)<\/strong><\/p>\n<\/td>\n

\n

New form (2025 Act)<\/strong><\/p>\n<\/td>\n

\n

What it’s for<\/strong><\/p>\n<\/td>\n<\/tr>\n

Form 16<\/td>\nForm 130 \u2014 now three parts, plus a senior citizen annexure<\/td>\nAnnual TDS certificate issued to employees<\/td>\n<\/tr>\n
Form 24Q<\/td>\nForm 138<\/td>\nQuarterly TDS return submitted by employers to the tax department<\/td>\n<\/tr>\n
Form 12BB<\/td>\nForm 124<\/td>\nEmployee declarations for HRA, LTC, and home loan interest<\/td>\n<\/tr>\n
(No standardised form existed)<\/td>\nForm 122 (new)<\/td>\nStandardised employee declaration for investments and deduction claims<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Note: Form 16 for FY 2025-26 will still go out under the old name \u2014 the switchover to Form 130 only applies from Tax Year 2026-27, once the current filing cycle finishes.<\/em><\/p>\n

Section numbers \u2014 what’s moved where<\/h4>\n\n\n\n\n\n\n\n
\n

Old section (1961 Act)<\/strong><\/p>\n<\/td>\n

New section (2025 Act)<\/strong><\/td>\n\n

Covers<\/strong><\/p>\n<\/td>\n<\/tr>\n

Section 192<\/td>\nSection 392<\/td>\nTDS on salary \u2014 employer estimates annual income and deducts tax monthly<\/td>\n<\/tr>\n
Scattered across multiple sections<\/td>\nSection 393<\/td>\nAll non-salary TDS consolidated here \u2014 residents, non-residents, any person; includes TDS on income of specified senior citizens<\/td>\n<\/tr>\n
Scattered across multiple sections<\/td>\nSection 394<\/td>\nAll TCS (Tax Collected at Source) provisions consolidated<\/td>\n<\/tr>\n
Section 80C<\/td>\nSchedule XV read with Section 123<\/td>\nInvestment deductions \u2014 PPF, ELSS, LIC, home loan principal, and so on<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The practical upshot: over sixty TDS and TCS provisions that were spread across the old Act are now in three sections. Section 392 is new Section 192. Section 123 does what Section 80C did. The compliance obligation itself hasn’t changed \u2014 annual income will be estimated at year-start and deducted proportionally each month.<\/p>\n

What falls inside TDS under Section 392<\/h3>\n

TDS applies to the full scope of what an employee earns, not just their monthly salary transfer. That includes:<\/p>\n