The Income Tax Department has recently introduced the Draft Income Tax Rules, 2026. Several income tax rules are likely to change, and these changes will affect all taxpayers.
Salaried individuals may also see changes in their pay structure. According to many experts, the old income tax regime could become attractive again once the Income Tax Act, 2025, comes into effect.
Let’s understand the key updates that will impact individual taxpayers.
Changes in Form Numbers: Form 16 and Form 26AS
Under the new rules, the names and numbers of some commonly used tax forms will change.
Form 16 will now be called Form 130.
Form 26AS will be renamed Form 168.
Form 16 (soon Form 130) is mainly for salaried employees. Employers issue this form every year by June 15. It includes details such as salary income, TDS (Tax Deducted at Source), tax paid, and deductions.
Form 26AS (soon Form 168) contains complete information about a taxpayer’s tax-related transactions. It includes details of TDS, TCS (Tax Collected at Source), advance tax, and tax refunds.
This form is issued by the Income Tax Department and can be downloaded from the Income Tax portal.
No Extra Compliance Burden for Taxpayers
Experts have clarified that the change in form numbers does not mean a change in tax rules.
Brajesh Pranami, Founder and CEO of Fly High Financial Services, said that renaming the forms will not change tax policies or increase the compliance burden on taxpayers.
CA Mrinal Mehta also explained that the reporting format of Form 130 and Form 168 will remain the same as the current Form 16 and Form 26AS.
The Income Tax Department will issue a separate notification about the filing process and deadlines.
When Will the New Rules Be Implemented?
The Income Tax Act, 2025, will come into effect from April 1 this year. Before this, the department has released the Draft Income Tax Rules, 2026 for public comments.
Stakeholders, including experts, CAs, and taxpayers, can share their feedback until February 22.
After reviewing the suggestions, the department may make necessary changes and then release the final rules. These final rules are expected within the next one or two months.
Introduction of a Single “Tax Year”
One of the biggest changes under the new Act is the introduction of a single term — “tax year.”
Currently, two terms are used:
Previous Year
Assessment Year
This often creates confusion among taxpayers. Under the new rules, only the term “tax year” will be used in all income tax procedures.
According to Mehta, Form 130 and Form 168 will refer to the tax year 2026–27. This change is expected to simplify the system and will not create any problems for taxpayers.
