The Income Tax department on Saturday sought public feedback on a set of draft rules under the Income Tax Act, 2025 aimed at making the filing of taxes simpler.
The new tax law comes into from 1 April, replacing the earlier legislation from more than six decades ago, the Income Tax Act, 1961.
The draft rules slash procedures by a third while a set of ‘smart forms’ shrink the earlier number of forms by more than half.
The income tax department said in a note that framing of rules followed the same principle it had adopted while redrafting the law—simplification of the language.
Earlier, the income tax rules contained 511 rules and 399 forms. “As a result of the changes proposed in new rules and forms, including removal of redundancy and consolidation of rules wherever possible, draft Income-tax Rules, 2026 contains 333 rules and 190 forms,” the department said in a statement.
Experts and the public can give feedback on the draft rules and forms until 22 February, the department said, adding that framing of rules is a participative effort.
Ease of compliance
The language in the rules has been simplified, the tax department noted in a statement. “Formulas and tables have been provided wherever necessary. Redundancy in the Income-tax Rules, 1961 has been sought to be eliminated. While preserving the larger content of the policy, certain changes have been introduced in line with the changes in the Income-tax Act, 2025,” the department said.
The forms which are part of the draft rules have also been simplified to a large extent for the ease of the tax payers. Standardization of common information has been done across the forms with a view to reducing the compliance burden of the tax payers.
Forms have been designed in a way so as to provide for automated reconciliation with pre-fill capabilities so as to make filing more intuitive and less error-prone, the department’s note explained.
These smart forms would make filing easier and enhance user experience. They would also enable centralized processing and decision-making driven by data, leading to better services to the taxpayers, the department said.
The language of the forms has also been simplified to avoid any operational, administrative or legal ambiguity. Notes to forms have been simplified, it said.
The changes are expected to simplify the provisions. The simplifications proposed in the process will help in ease of living and general ease of business across all sections of taxpayers, the department said. Simpler forms and use of technology are expected to bring considerable ease to the users.
Pre-filled forms, better navigation
Richa Sawhney, partner, tax, at Grant Thornton Bharat LLP said that the new rules have been drafted to ensure they are easy to comply with for all taxpayers.
“The use of tables will help in better navigation. The focus on technology in ensuring the forms are pre-filled and reconciled will reduce the time spent in compliances and reduce inadvertent errors,” said Sawhney.
It is important that stakeholders share their inputs on the changes so that “any teething issues in implementation are mitigated and there is a smooth transition,” said Sawhney.
Sandeep Jhunjhunwala, partner at Nangia Global, a professional services firm, said the rationalized rules signalled a “thoughtful and forward-looking approach to legislative implementation”.