WHY THE NEW INCOME-TAX RULES BLUR THE REGIME DIVIDE

Tax simplification should be cause for cheer.

- VIJAYKUMAR PURI

That was the government's stated intent in enacting the Income-tax Act, 2025—a rewrite of the six-decade-old Income-tax Act, 1961 using clearer language and better-organised sections. Now it has released the draft Income-tax Rules, 2026 for public consultation, with implementation scheduled from April 2026.The headline promise is reassuring: consolidation, rationalisation and smarter compliance through pre-filled returns. But a familiar contradiction emerges. While administrative simplification is advancing, taxpayer decision-making—especially for salaried individuals—is quietly becoming more complex. That tension lies at the heart of the draft rules.

Fewer rules

At a structural level, the draft rules meet their stated objective. Through consolidation and removal of redundant provisions, the number of rules and forms has been sharply reduced—from 511 rules and 399 forms under the old law to 333 rules and 190 forms.