The Central Board of Direct Taxes (CBDT) has issued Income-tax Rules, 2026, aligning with the new Income-tax Act, 2025, effective from April 1. Changes include higher thresholds for mandatory PAN quoting, unified forms, and new exemptions for salaried employees. Tax experts suggest the old regime may offer advantages for middle-income earners.
The Central Board of Direct Taxes (CBDT) has introduced sweeping changes through Income-tax Rules, 2026, reducing the number of forms from 399 to 190 to ease compliance. Thresholds for mandatory PAN quoting have risen: Rs 10 lakh for aggregate cash deposits or withdrawals in a financial year, Rs 5 lakh for motor vehicle purchases including motorcycles, Rs 1 lakh for hotel or restaurant bills, and Rs 20 lakh for immovable property transactions. A unified challan-cum-statement replaces separate TDS forms for property, rent, contractors, and crypto assets, filed using the deductor's PAN instead of TAN. TDS applies on rent exceeding Rs 50,000 per month, immovable property transfers over Rs 50 lakh, professional payments above Rs 50 lakh, and virtual digital assets without limit. Form 121 unifies interest declarations from Forms 15G and 15H. Salaried employees must disclose the tax regime chosen with previous employers upon job changes; Form 130 replaces Form 16 for salary summaries. Perquisites will be reported in Form 123, digitally linked to Form 130, with electric vehicles now valued like cars under 1.6 litres. Amit Maheshwari, Managing Partner at AKM Global, said, “EVs are now treated at par with cars having engine capacity not exceeding 1.6 litres for valuing perquisites.” Meal vouchers gain exemption up to Rs 200 per meal even under the new regime. Suresh Kumar S, Partner at Deloitte India, noted, “This will equate to Rs 4,400 for one meal a day or Rs 8,800 for two meals a day basis 22 working days a month.” Children's education allowance rises to Rs 3,000 per month per child (up to two) from Rs 100, and hostel allowance to Rs 9,000 from Rs 300. The 50% HRA city list expands to include Bengaluru, Hyderabad, Pune, and Ahmedabad. HRA claims require evidence via Form 124, including landlord details and PAN if annual rent exceeds Rs 1 lakh. The new Act introduces 'tax year' from April 1. SFT reporting threshold for insurance premiums drops to Rs 5 lakh with PAN or Rs 2.5 lakh without. Experts like Rahul Charkha favor the old regime for middle-income earners with deductions, while Vishwas Panjiar of SVAS Business Advisors highlighted tight timelines, saying, “Compressed timelines don’t produce compliance, they produce gaps.”