Draft Income-tax Rules 2026: PDF, Key Changes & Simplified ITR Forms

The Draft Income Tax Rules, 2026 was released by the Central Board of Direct Taxes on February 7th, 2026, inviting suggestions and opinions from various stakeholders. Tax professionals, experts and the public at large can express their opinions within 22nd February, 2026.

What are the Draft Income Tax Rules, 2026?

Rules attached to an act prescribe specific compliance requirements, monetary limits, form filing requirements, etc. Prescribing a detailed compliance requirement and minor details in the act makes it very lengthy. Therefore, prescribing these in the rules makes the act simpler, and compliance equally efficient. After the act is passed, the corresponding rules are prescribed for the required sections. 

Before passing the rules, it is customary for the government to release a draft and collect opinions from experts, the general public and other stakeholders. Thereby, the government has released a draft of the Income Tax Rules 2026, inviting suggestions for improvement.

When will the New Income-tax Rules come into force?

The Income Tax Rules come into effect from 01st April, 2026, along with the Income Tax Act, 2025.

Key Changes that will impact Taxpayers

The following are the key changes proposed in the Draft Income Tax Rules 2026.

1. Allowances and Perquisite Valuation Rules 

This is a long-awaited change; the draft rules now reflect the exempt allowances and perquisite value consistent with the current market rates and inflation. This makes the exemptions and benefits meaningful, contrary to the existing rules. The following table shows the allowances and perquisite rules as proposed in the Draft Income Tax Rules, 2026.

2. PAN Quoting Requirements & Monetary Limits

The following table shows the changes made in the PAN quoting requirements for various transactions.

3. Other Important Areas Covered

Changes are made related to SFT transactions and other miscellaneous areas. The following table summarises the changes.

Old Tax Regime vs New Tax Regime – What Survives in 2026 Rules?

• The most beneficial regime for any taxpayer depends on their income and deduction/exemption levels. 
• With the exemption limits for various allowances and perquisites for salaried employees increased, the old regime might prove beneficial for a section of taxpayers.
• If you already have many tax-saving deductions and the old regime is still not beneficial for you, these increased deductions and exemption limits can reduce your taxable income, making the old regime more beneficial.

How to give feedback on the Draft Income-tax Rules 2026?

• You can give feedback on the forms using the given link on the Income Tax Portal.
• You can enter your name, mobile number and OTP to enter the feedback page.
• Fill in the necessary details with a clear description of your opinion. Choose in which category your opinion falls:
  • Making rules and forms more comprehensible
  • Identifying provisions leading to frequent disputes
  • Removing outdated or redundant rules/forms
  • Streamlining documentation and procedural requirements
• Make sure you enter the rule number or form number in the proposed rules, not the existing ones.
• Submit your response.