IncomeTax 2026 : New income tax rules effective from April 1, 2026; Digital filing mandatory

The central government has decided to implement new income tax rules across the country from April 1, 2026. The Income Tax Act, 1961, which has been in force for 60 years, will now be abolished and replaced by the 'Income Tax Rules 2026'. The Income Tax Department has opened the draft rules for public discussion, and citizens have the opportunity to submit their feedback until February 22, 2026.

ITR-1 is a simple form for taxpayers with income from salary, house rent, and bank interest. According to the new rules, the process of filling this form must be completed through digital payment.

ITR-2 is for taxpayers with capital gains, more than one property, foreign income, or assets abroad. If not eligible for ITR-1, you must directly file ITR-2.

ITR-3 will be the main form for business and professional taxpayers.

Significant changes have been suggested in the rules for PAN cards. PAN cards will not be required for transactions up to 1 million rupees in a year. Previously, it was mandatory to provide a PAN for transactions exceeding 50,000 rupees in a day. The PAN limit for hotel bills has been increased from 50,000 to 100,000 rupees. It is recommended to increase the limit for property transactions and gifts from 1 million to 2 million rupees. For vehicle purchases up to 500,000 rupees, a PAN is not required; for higher amounts, a PAN will be mandatory.