The Income Tax Department has released draft rules and forms for the upcoming Income Tax Act, 2025, and has invited feedback from taxpayers, professionals and other stakeholders. The new law is scheduled to come into force from April 1, 2026, replacing the existing Income Tax Act, 1961.
According to the department, the draft rules aim to make India’s tax system simpler, clearer and easier to comply with. The Central Board of Direct Taxes (CBDT) said the exercise is part of a consultative approach so that practical concerns can be addressed before the rules are finalised.
One of the biggest changes proposed is a sharp reduction in complexity. The current framework has over 500 rules and nearly 400 forms. Under the draft rules, this has been cut down significantly to around 330 rules and fewer than 200 forms. Many outdated and repetitive provisions have been removed to make tax compliance less burdensome.
The draft also proposes clearer definitions and updated thresholds in several areas. These include rules related to perquisites, allowances, reporting requirements, and certifications by professionals such as accountants. The intention is to reduce confusion, improve consistency and lower the chances of disputes between taxpayers and the department.
To ensure wider participation, the Income Tax Department has opened an online feedback window on the income tax e-filing portal. Taxpayers and stakeholders can submit their suggestions after OTP-based verification. Feedback must clearly mention the relevant rule, sub-rule or form number. The consultation process will remain open until February 22, 2026.
Officials said the feedback received will be carefully examined and may lead to changes in the final version of the rules. The department believes that involving taxpayers at this stage will help create a more transparent and user-friendly tax system.
