What Is the Income-tax Rules, 2026?
The Income-tax Rules, 2026 are the procedural rules notified by the Central Board of Direct Taxes (CBDT) under the Income-tax Act, 2025, in force from 1 April 2026. They replace the Income-tax Rules, 1962, which had prescribed filing procedure, forms, and thresholds under the repealed Income-tax Act, 1961. The most visible change for anyone dealing with Indian tax paperwork is that the Rules renumber essentially every income tax form — the old mix of numbered and lettered form names such as Forms 41, 145, 146 and 168 (formerly Forms 10F, 15CA, 15CB and 26AS) and 16 is replaced by new numbers under a single sequential scheme, while the underlying declarations and the information they collect stay materially the same.
For a foreign company or investor, the Income-tax Rules, 2026 are not a change in tax policy — rates, treaty entitlements, and thresholds mostly come from the Act and from the relevant DTAA, not the Rules. What the Rules change is the paperwork: which form number your bank, auditor, or the Income Tax Department's e-filing portal expects to see for a filing made on or after 1 April 2026.
Legal Basis
Commencement Under the Income-tax Act, 2025
The Income-tax Act, 2025 (Act 30 of 2025, which received presidential assent on 21 August 2025) commenced on 1 April 2026 under section 1(3) of the Act. Its savings clause, section 536(2)(c), keeps the Income-tax Act, 1961 — and the machinery built under it, including the Income-tax Rules, 1962 — in force for any tax year beginning before 1 April 2026. In practice this means both rule sets are live law at the same time, for different years: the 1962 Rules for assessment of FY 2025-26 and earlier, and the Income-tax Rules, 2026 for FY 2026-27 onward.
CBDT Notification No. 22/2026, G.S.R. 198(E)
The Income-tax Rules, 2026 were notified by the CBDT vide Notification No. 22/2026, G.S.R. 198(E), taking effect on 1 April 2026 together with the Act they implement. The CBDT has since issued a corrigendum to that notification, G.S.R. 286(E), dated 16 April 2026 — a reminder that the Rules, like any new procedural code, have been subject to correction in their first weeks, and that anyone relying on a specific rule number should check the Income Tax Department's current published version rather than the original gazette text alone.
What the Rules Changed: Every Form Got a New Number
The single largest practical effect of the Income-tax Rules, 2026 is a wholesale renumbering of income tax forms. The Income Tax Department's own form pages carry an "Earlier Form No." label showing the mapping. Examples that matter most to foreign investors and their Indian subsidiaries:
| Form Under the 1962 Rules | Form Under the 2026 Rules | Purpose |
|---|---|---|
| Form 41 | Form 41 | Non-resident's declaration to claim DTAA benefits |
| Form 42 (formerly Form 10FA) | Form 42 | Application to an Assessing Officer for a Tax Residency Certificate |
| Form 145 | Form 145 | Remitter's declaration before a foreign remittance |
| Form 146 | Form 146 | Chartered Accountant's certificate for a foreign remittance |
| Form 144 (formerly Form 27Q) | Form 144 | TDS return for payments to non-resident payees |
| Form 140 (formerly Form 26Q) | Form 140 | TDS return, resident non-salary payments |
| Form 138 (formerly Form 24Q) | Form 138 | TDS return, salary payments |
| Form 143 (formerly Form 27EQ) | Form 143 | TCS return |
| Form 168 | Form 168 | Annual Tax Statement (linked to PAN) |
| Form 130 (formerly Form 16) | Form 130 | Salary TDS certificate |
| Form 123 (formerly Form 12BA) | Form 123 | Statement of perquisites |
Two things are worth noting about this exercise. First, the substance of these forms has not changed along with the number — for example, Form 41 asks for the same tax-residency details that Form 10F did, and Form 145 keeps the same Part A / Part B / Part C / Part D structure that Form 15CA used, so a filer who has used the old forms before is not learning a new process, only a new number. Second, the ITR series was left alone. The annual return forms kept their ITR-1 to ITR-7 names for Assessment Year 2026-27, and the CBDT went on to prescribe a further ITR-named form, Form ITR-BN, under the 2026 Rules themselves — so the renumbering exercise applies to the standalone forms prescribed under specific rules (TDS returns, remittance certificates, treaty declarations, statements), not to the return series.
The Rules Also Prescribe New Filing Procedure
Beyond renumbering, the Income-tax Rules, 2026 continue to be amended to add new compliance machinery, in the same way the 1962 Rules were amended for decades after their original notification. The CBDT's Income-tax (Third Amendment) Rules, 2026 (Notification No. 97/2026 [F. No. 370142/11/2026-TPL], dated 27 July 2026) introduced Form ITR-BN and amended Rule 332 by inserting a new Appendix IV, to govern returns relating to search-and-requisition cases, with effect from 1 April 2026. This is the kind of change the Rules will keep making: not just a form's number, but the procedure attached to a specific compliance event.
Why This Matters for Foreign Companies and Investors
Every cross-border filing a foreign investor makes in India now runs through a renumbered form:
- A non-resident claiming a lower DTAA withholding rate on Indian dividends, interest, royalties, or fees for technical services files Form 41 (also covered on this glossary as Form 41), not Form 41, alongside a Tax Residency Certificate.
- An Indian subsidiary remitting money to its foreign parent files Form 145 (the old Form 15CA), and where the remittance is taxable above the Part C threshold, obtains Form 146 (the old Form 15CB) from its Chartered Accountant.
- An Indian company that has deducted TDS on payments to a non-resident payee reports it on Form 144, not the old Form 27Q.
- A non-resident who needs a Tax Residency Certificate from an Indian Assessing Officer (relevant to certain outbound structures) applies on Form 42, not Form 42.
Getting the form number wrong does not change a taxpayer's substantive entitlement — a Form 41 filed correctly still secures the same treaty rate a Form 41 would have — but it can cause friction with a bank, a remitting company's finance team, or an auditor who is working from an old checklist or an old engagement letter, especially in the transition months around 1 April 2026.
Practical Checklist for FY 2026-27 Filings
A foreign-owned Indian subsidiary preparing its first full compliance cycle under the new numbering should confirm, for each recurring filing: the current form number (using the table above as a starting point, and checking the Income Tax Department's e-filing portal for anything not listed here); that any template, board resolution, or engagement letter referencing an old form number has been updated; and that its bank, registrar, and CA firm are filing under the new numbers rather than the old ones, since payment processing and TDS certificates for FY 2026-27 onward should carry the current form references.
Common Mistakes
- Filing an FY 2025-26 (or earlier) return or certificate using a 2026-Rules form number. Tax years beginning before 1 April 2026 stay under the Income-tax Act, 1961 and the Income-tax Rules, 1962 — the old form numbers are still correct for those years, not an error to be fixed.
- Assuming the renumbering changed a form's substance. For the forms confirmed to date, the fields, thresholds, and structure carried over unchanged from the 1962-Rules version — only the number moved.
- Using an outdated engagement letter, board resolution, or bank mandate that still names an old form. Update recurring paperwork with your auditor, bank, and Indian subsidiary to reference the current form number so approvals and payment processing are not held up on a technicality.
- Treating an unofficial rule-number citation as settled. The CBDT corrigendum of 16 April 2026 to the principal notification is a reminder that specific rule numbers under the 2026 Rules can change; verify against the Income Tax Department's current published text before relying on one.
Frequently Asked Questions
Do the Income-tax Rules, 2026 apply to income earned before 1 April 2026?
No. Under the savings clause at section 536(2)(c) of the Income-tax Act, 2025, any tax year beginning before 1 April 2026 continues to be governed by the Income-tax Act, 1961 and the Income-tax Rules, 1962. The Income-tax Rules, 2026 apply to FY 2026-27 and later years.
Has the content of the forms changed, or only the numbers?
For the forms confirmed so far, the substance is unchanged — Form 41 collects the same tax-residency information Form 41 did, and Form 145 keeps the same Part A/B/C/D structure Form 145 used. The renumbering is a reorganization of the form-numbering scheme, not a change to what filers must disclose.
What form do I file instead of Forms 145 and 146 now?
Form 145 is now Form 145 and Form 146 is now Form 146. Form 146 is still required only for Part C of Form 145 — a taxable remittance above the prescribed threshold where no Assessing Officer certificate has been obtained.
Is there a corrigendum to the Income-tax Rules, 2026?
Yes. The CBDT issued a corrigendum, G.S.R. 286(E), dated 16 April 2026, to the principal notification G.S.R. 198(E). Anyone citing a specific rule number under the 2026 Rules should verify it against the Income Tax Department's currently published text rather than the original notification alone.
Do the 2026 Rules only renumber old forms, or do they also create new procedures?
Both. Alongside the renumbering, the CBDT continues to amend the Rules to add new machinery — for example, the Income-tax (Third Amendment) Rules, 2026 introduced Form ITR-BN and amended Rule 332 to insert a new Appendix IV for search-and-requisition return filing, effective 1 April 2026.
See also: Income Tax Return (ITR), Form 41 (formerly Form 10F), and Forms 145 and 146 (formerly Forms 15CA and 15CB).
Setting up an Indian subsidiary or managing cross-border payments under the new form numbering? Beacon Filing keeps client filings current with the Income-tax Rules, 2026 and handles the renumbered treaty and remittance forms end to end.