Filing income tax may soon become simpler.
The Income Tax Department has proposed new draft rules that could remove one extra step while choosing between the old and new tax regimes.
If approved, taxpayers will no longer need to file a separate declaration form just to select their preferred tax system.
Here’s what is changing.
What Is the Current Rule?
Right now, some taxpayers — especially those with business or professional income — must file a separate form called Form 10-IEA.
This form is required if they want to opt for the old tax regime.
It must be submitted electronically before the income tax return deadline under the Income-tax Rules, 1962.
However, salaried individuals without business income do not have to file this extra form.
They can simply choose the tax regime directly while filing their return.
This difference has created confusion and extra paperwork for certain taxpayers.
What Will Change Under Draft Rules 2026?
Under the proposed Draft Income Tax Rules, 2026, taxpayers will be able to choose between the old and concessional (new) tax regimes directly inside their income tax return.
No separate form will be required.
The option to opt in — or withdraw — will be exercised within the return filed under the Income Tax Act, 2025.
In simple terms, everything will be done in one place: the ITR form.
This means fewer steps and less compliance burden.
Who Will Be Covered?
The new rule will apply to multiple categories, including:
Individuals and HUFs
Domestic companies
New manufacturing companies
Resident co-operative societies
Certain associations and artificial juridical persons
For each tax year, taxpayers will need to select or withdraw their preferred regime while filing that year’s return.
Why This Matters for Taxpayers
The biggest benefit is simplicity.
Currently, business owners face more compliance requirements compared to salaried employees.
The proposed change removes that gap.
It:
Reduces paperwork
Eliminates duplication
Brings uniformity across taxpayer categories
Makes regime selection more straightforward
If the draft rules are notified in their present form, they will come into effect along with the new Income Tax Act, 2025.
For taxpayers, this could mean a smoother and more user-friendly filing experience in the coming years.
