New Delhi, February 7: The Income Tax Department has released a comprehensive set of draft Income-tax Rules, 2026, aimed at simplifying tax filing and reducing the compliance burden on Indian citizens. Released on Saturday, the new framework proposes a significant reduction in the number of rules and forms, replacing the long-standing Income-tax Rules of 1962. These changes, which follow through on commitments made during the Union Budget 2026, are scheduled to take effect from April 1, 2026, coinciding with the start of the 2026-27 financial year.

Major Reduction in Rules and Forms

In a push toward administrative efficiency, the Central Board of Direct Taxes (CBDT) has streamlined the existing tax code. The draft framework slashes the total number of rules from 511 to 333. Similarly, the number of official tax forms has been nearly halved, dropping from 399 to 190. Budget 2026 FAQs: From Income Tax Slabs Under New Tax Regime To Transition to ‘Income Tax Act 2025’, All Your Questions Answered Here.

Officials stated that this reduction was achieved by removing redundant provisions and merging similar rules wherever possible. To assist taxpayers in navigating this transition, the government has introduced two online navigational tools that provide side-by-side comparisons between the current and proposed rules and forms.

Simplified ITR Filing and Prefilled Data

A key highlight for the common taxpayer is the redesign of Income Tax Return (ITR) forms. The new forms focus on standardization and the use of technology to minimize manual entry.

  • Standardization: Common details have been synchronized across different forms to prevent taxpayers from entering the same information multiple times.

  • Automation: The forms will feature enhanced prefilled information and automated reconciliation, which the department expects will reduce filing errors and lower the likelihood of tax notices.

  • Clarity: The language used in ITR forms and explanatory notes has been simplified to reduce legal and operational ambiguity.

Public Feedback Period Open

The CBDT has invited stakeholders and the general public to review the draft rules and provide suggestions. The feedback window is open for 15 days, with the deadline for submissions set for February 22, 2026. This move is part of the government’s effort to make the process of framing subordinate legislation more inclusive and effective. Income Tax Slabs and Rates: Know New vs Old Regime Ahead of Budget 2026.

Background and Context

The release of these draft rules follows Union Finance Minister Nirmala Sitharaman’s Budget 2026 speech on February 1. At the time, she emphasized that the new rules would be notified early to give taxpayers adequate time to familiarize themselves with the requirements.

Tax experts have noted that the shift toward "technology-enabled" forms and faceless assessments signals a move toward a more user-friendly tax ecosystem. For most individual taxpayers, the primary benefit will be a more intuitive filing experience that relies heavily on data-based decision-making rather than complex manual reporting.

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(The above story first appeared on LatestLY on Feb 07, 2026 10:26 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).