Income Tax Rules 2026: The Finance Ministry has issued the official gazette notification of ‘Income Tax Rules 2026’. The rules written in this new draft of more than 2500 pages will be implemented in the entire country from April 1, 2026. These rules will replace the old Income Tax Act of 1961, that is, now the numbers of all the sections will also change. This will have a direct impact on the common man, employees, tenants, landlords and businessmen.

If the company deposits more in PF and NPS then it will have to pay tax.

If your company deposits more than Rs 7.5 lakh in a year in your Provident Fund (PF), NPS or Superannuation Fund, then the amount above this limit will be considered part of your salary and will be taxed. Besides, a new formula has also been decided to calculate tax on the interest received on that additional amount.

If you want HRA, it is necessary to give PAN of the landlord.

If you avail the benefit of HRA i.e. House Rent Allowance by submitting rent receipt, then keep in mind that if the total rent for the year is more than Rs 1 lakh, then it will be mandatory to give the name, address and PAN number of the landlord to the company. Without this, HRA exemption will not be available.

If you have got a company house then the tax will be according to the population of the city.

If the company gives you a free house to live in, then now tax on it will be levied according to the population of the city. In a city with a population of more than 40 lakh, this facility will be considered as 10 percent of your salary and tax will have to be paid on the same.

Company car, food and gifts new rules

Personal use of company car will be taxed according to the engine capacity. Tax exemption will be available on food up to Rs 200 per meal while working in office. There will be no tax on gifts up to Rs 15,000 in a year.

Don’t panic if you get pending salary (arrears) at once. Fill Form 39.

Many times, when outstanding salary, advance or old pension comes together, the income increases and the tax slab goes up. Under the new rules, special relief can be claimed by filling ‘Form 39’. The same exemption will be applicable on gratuity received after 5 to 15 years of service and compensation received on loss of job.

There is a condition on relief to those taking VRS

If you take Voluntary Retirement i.e. VRS, then you will get tax exemption on the amount received on it. But for this, either one should have completed at least 10 years of service or the age should be more than 40 years.

Relief to landlord if tenant does not pay rent

If the tenant does not pay the rent and vacates the house, then that outstanding rent will not be considered as the income of the landlord and will not be taxed. But the condition is that the landlord will have to prove that he took legal steps to collect the rent.

Complete tax exemption if the company incurs expenses on treatment of serious diseases

If the company bears the expenses of serious diseases like cancer, TB, AIDS or any surgery or hospitalization for at least 3 days, then it will get complete tax exemption. Treatment of drug addiction and mental illnesses is also included in this.

In case of disability, a certificate from a civil surgeon or neurologist of a government hospital will be required for exemption from diseases like autism or cerebral palsy. In case of diseases like kidney failure, hemophilia or thalassemia, it will be mandatory to have a prescription from the concerned specialist doctor.

Cash payment more than Rs 10,000 will not be exempted.

Attention businessmen and professionals. If someone pays more than Rs 10,000 in cash in a day, it will not be considered as business expense and tax exemption will not be available. All payments above Rs 10,000 will have to be made through cheque, UPI, card or net banking only. Payments made to farmers, villages and government will remain out of this.

Official recognition of digital payment and digital rupee

UPI (BHIM), Credit-Debit Card, Net Banking, NEFT and RTGS have been officially recognized as valid under Income Tax. And this time for the first time, RBI’s digital rupee (e-₹ i.e. Central Bank Digital Currency) has also been accepted as a valid method for tax and business transactions.

Foreign digital companies will now be taxed in India

This is a completely new rule. If a foreign company is providing software, digital services or data in India without opening an office and its annual income from India is more than Rs 2 crore or has more than 3 lakh users in India, then it will be taxed in India.

New formula for capital gain on selling shares and property

New mathematical formulas have been fixed to find the correct market price of shares which are not listed in the stock exchange. Its objective is to prevent tax evasion in the purchase and sale of property and such unlisted shares.

Form 44 will save you from double tax if you have income from abroad.

New forms and deadlines have been fixed for deducting, depositing and giving certificates of TDS and TCS. New rules of ‘Form 44’ will be applicable to avoid double tax on income earned from abroad.

Overall, this new Income Tax Rule 2026 is not just a legal change. This is an attempt to rewrite the language, calculations and methods of the entire tax system. It is important for every employee, businessman and investor to read these rules carefully before April 1, 2026.

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Draft Income Tax Rules 2026: CBDT i.e. Central Board of Direct Taxes has released the draft of Income Tax Rules 2026. The purpose of this draft is said to be to make the income tax rules simpler and more clear. The draft includes many important proposals which will have a direct impact on common taxpayers.

According to the draft, it will be necessary to provide PAN if an amount of Rs 10 lakh or more is deposited or withdrawn in a financial year. Till now this rule was applicable on depositing Rs 50 thousand in a day, which has been proposed to be changed. Changes have also been suggested in the rules related to vehicle purchase. According to the proposal, PAN will be mandatory for purchasing a car or two-wheeler worth Rs 5 lakh or more. At present, it is mandatory to provide PAN when purchasing a vehicle of any value.

Many changes in the new Income Tax Act

There is also a proposal in the draft to increase the limit of payments made in hotels, restaurants and other programs. It has been said that it will be increased from the current Rs 50 thousand to Rs 1 lakh. It has also been proposed to increase the limit for transactions related to real estate. According to the draft, it will be mandatory to provide PAN when buying, selling or gifting property worth Rs 20 lakh or more. Currently this limit is Rs 10 lakh.

A proposal to change the rules related to insurance is also included. It has been said in the draft that it will be necessary to provide PAN to open an account with any insurance company. At present this rule applies to premiums of Rs 50 thousand or more.

Proposal to increase tax free education allowance

Changes have also been suggested in the rules related to House Rent Allowance i.e. HRA. According to the draft, the list of metro cities has been increased. Earlier Delhi, Mumbai, Chennai and Kolkata were included in this list, whereas now there is a proposal to add Bengaluru, Pune, Hyderabad and Ahmedabad also to it.

Apart from this, it has also been said in the draft to increase the limit of tax free allowance related to children. It has been proposed to increase the tax free education allowance for children from Rs 100 to Rs 3000 per child. There is also a plan to increase the limit of hostel allowance for children. According to the draft, it has been proposed to increase it from the current Rs 300 to Rs 9000 per child.

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ITR Refunds: Difficulties are going to increase for those who get tax refund by showing fake donations. The Income Tax Department has taken a tough stance and started strict investigation against such taxpayers who try to get refunds by making false claims of making alleged donations to political parties or various organizations while filing Income Tax Returns (ITR). The department says that now such cases are being closely monitored and strict action will be taken against those found guilty.

According to Income Tax officials, in recent times a large number of such cases have come to light in which taxpayers have claimed to donate to any political party or charitable organization, but during investigation these claims were found to be suspicious or completely fake. In many cases, it has also come to light that instead of giving the donation directly to the concerned organization, it was shown through an intermediary or agent, so that more refund could be claimed by taking tax exemption.

Now the Intax Department will wield power!

The Income Tax Department has issued this warning at a time when there is a delay in processing the refunds of many taxpayers. Officials have clarified that a major reason for the delay in refund is that now the claims made in the returns are being thoroughly investigated. Especially those cases are being investigated where the claims of tax exemption and refund are unusually high.

During the investigation, the department got information about a whole network of agents and middlemen who provide fake documents to taxpayers in exchange for commission. These agents assure the taxpayers that by filing returns through them, the tax will be very less and the refund will be more. For this, fake donation receipts, documents of donations in the name of unrecognized political parties and in some cases, receipts of fake charitable trusts were used.

Strict strictness of Income Tax Department

The Income Tax Department has made it clear that not only will the refund be stopped against those making such fake claims, but penalty, interest and legal action can also be taken in serious cases. The department says that under the Income Tax Act, availing tax exemption by giving false information is considered a serious crime.

The department has appealed to honest taxpayers to claim tax exemption only on genuine and valid donations and not to fall prey to any agent or middleman. Besides, taxpayers have also been advised to check all the documents properly before filing the return, so that any kind of problem can be avoided in future.

Overall, this step of the Income Tax Department is being considered as a big and strict message towards increasing transparency in the tax system and preventing loss of revenue through fake refunds.

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Income tax return deadline: The time limit for filing income tax returns for FY 2025 (Assessment Year 2025-26) has been extended for one day. That is, the taxpayers who have not been able to file income tax returns so far, will get a chance till today i.e. on 16 September 2025.

The Central Board of Direct Taxes (CBDT) said in a late night statement that the last date of filing income tax for assessment year 2025-26 has been increased from September 15 to September 16. CBDT made it clear that the e-filing portal will be on maintenance on September 16 from 12:00 am to 2:30 pm to change the services.

Relief for taxpayers

It is worth noting that a large number of taxpayers had complained about technical flaws while filing income tax returns. In view of these problems, it has been decided to increase the time limit. Notification to this effect has been issued separately.

Earlier, Chartered Accountants and Taxpayers were constantly complaining about the problems coming about the e-filing portal on social media. He was expressing dissatisfaction with the delay in the release of Annual Information statement, slow speed and ITR utilities.

The tax department says that by September 15, more than 7 crore ITRs have been filed. The statement further said that taxpayers and tax professionals thank, who helped us reach this milestone. Also, we urge all that those who have not been able to file the Income Tax Return (ITR) for the assessment year 2025-26, must file their ITR.

For the convenience of taxpayers, ‘Assist Taxpayers Helpdesk’ 24X7 has been provided by the department. Through this, taxpayers can get help through calls, live chats, social media platforms and Webex.

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