Objective of New Income Tax Act 2025:
The Income Tax Act, 2025 has been enacted to provide a streamlined, simplified, and modern tax code with reduced compliance burden, consolidated provisions, and clear definitions. Over six decades, the Income Tax Act, 1961 had accumulated numerous amendments, provisos, and explanations making it complex and difficult to navigate. The new Act aims to present the same tax policy in a more logical, accessible, and reader -friendly format. The Act further advances taxpayer centric approach by making compliance simpler,promoting ease of doing business, and aligning the Indian tax system with contemporary global standards.
Effective April 1, 2026, the Income Tax Act, 2025, replaces the 1961 Act, resulting in major renumbering, restructuring, and simplification of tax forms to streamline compliance. Key changes include renaming Form 16 to Form 130 (salary TDS), Form 26AS to Form 168 (tax credit), and merging 15G/15H into Form 121. Forms are now more standardized and pre-filled.
Key Changes to Forms Effective April 1, 2026:
- Renaming/Renumbering: Several common forms have new numbers under the Income Tax Rules 2026.
- Form 16 (Salary TDS Certificate) becomes Form 130.
- Form 16A (Non-salary TDS Certificate) becomes Form 131.
- Form 26AS (Annual Tax Statement) becomes Form 168.
- Form 12BB (Declaration for salary deductions) becomes Form 124.
- Merged Forms: Forms 15G and 15H (declarations for non-deduction of TDS) are consolidated into a single Form 121.
- Audit Forms: Forms 3CA, 3CB, and 3CD are consolidated into Form 26.
- New Fields: A field for “unrealised rent” is added to ITR-1 and ITR-4 for Assessment Year 2026-27.
- Simplified Reporting: Forms are designed to be more standard, reducing the need for repetitive information and reducing errors.
- Digital Integration: Enhanced pre-filling capabilities, reducing manual input.
- Documentation: New Form 3CF for research entity approvals and other specific business notifications (3CN, 3CS).
- Taxpayer Impact: Businesses must update HR/payroll systems (Form 130/131/124) and align with the new 2025 Act, which replaces terms like ‘previous year’ with ‘tax year’ and drops ‘assessment year’
Income Tax Rules 2026
Income Tax Department has released draft income tax rules 2026 on 07th February 2026 and officially notified on 20th March 2026 and these are going to be effective from 01st April 2026. The income tax rules 2026 has been simplified in comparison to Income Tax Rules 1962
| Particulars | Income Tax Rules, 1962 | Income Tax Rules, 2026 |
| Rules | 511 | 333 |
| Forms | 399 | 190 |
The below table shows key changes in Form number from “Income tax Act 1961” to “Income Tax Act 2025”:
| Purpose of Form | Form_ ITA 1961 | Form_ ITA 2025 |
| Tax Audit Report | Form 3CA/3CB/3CD | Form 26 |
| Relief of Salary Arrear | Form 10E | Form 39 |
| Foreign Tax Credit Claims | Form 67 | Form 44 |
| PAN Application | Form 49AA | Form 95 |
| PAN Applicants Declaration | Form 60 | Form 97 |
| TDS Non-Deduction Declaration | Form 15G/15H | Form 121 |
| Investment Declaration | Form 12BB | Form 124 |
| Statement of Perquisite | 12BA | Form 123 |
| Salary TDS Certificate | Form 16 | Form 130 |
| Non-Salary TDS Certificate | Form 16A | Form 131 |
| TCS Certificate | 27D | Form 133 |
| Salary Qtr TDS Return | Form 24Q | Form 138 |
| Non-Salary Qtr TDS Return | Form 26Q | Form 140 |
| Challan Cum Statement of TDS | Form 26QB/C/D/E | Form 141 |
| Quarterly TCS Return | Form 27EQ | Form 143 |
| Foreign Remittance Declaration | Form 15CA | Form 145 |
| Foreign Remittance CA Certificate | Form 15CB | Form 146 |
| Annual Info Statement | Form 26AS | Form 168 |
| Lower / Nil TDS Certificate | Form 13 | Form 128 |
| Quarterly TCS Statement | Form 27EQ | Form 143 |
| Declaration for individuals domiciled in India not holding PAN or having income chargeable to tax | – | Form 157 |
| Audit report covering deductions u/s 46, 138, 139, 140(8), 141, 142, 143, 144 | – | Form 32 |
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