With the IT Act 2025 coming into force on 1 April 2026, the Income-tax Rules have been comprehensively rewritten as the Income-tax Rules, 2026. These rules operationalise the new Act, prescribing forms, computation methods, and procedural requirements.
What Changed in the Rules
New Rule Numbering: Like the Act, every rule number has changed. The old Rule 11UA (valuation of unquoted shares) is now under a new rule number. The old Rule 12 (return forms) has been restructured. CAs who relied on rule numbers in their practice will need to update their references.
New Forms: ITR forms for AY 2026-27 will reference the 2025 Act sections. While CBDT has not released the final forms at the time of writing, the draft rules indicate:
- ITR-1 (Sahaj) will continue for salaried individuals with income up to Rs. 50 lakh
- ITR-2 will cover individuals and HUFs without business income
- ITR-3 will cover individuals and HUFs with business income
- ITR-6 for companies and ITR-7 for trusts will have restructured schedules
TDS/TCS Forms: Form 26Q (quarterly TDS return) and Form 27Q (TDS on non-residents) will reference new section numbers. The old Section 194C becomes Section 393, and TDS certificates under Form 16A will cite the 2025 Act.
How Rules Map to the New Act
The mapping is not always straightforward. Here are the key areas:
Valuation Rules: The old Rules 11UA, 11UAA, and 11UAB (angel tax, share valuation) map to new rules under Part IV of the 2026 Rules. The substantive valuation methods (NAV, DCF, merchant banker) remain similar, but the rule references in share subscription agreements will need updating.
Depreciation: Rule 5 (depreciation rates and block of assets) has been restructured. The rates themselves have not changed for AY 2026-27, but the rule number and schedule format are different.
Transfer Pricing: Rules 10A through 10THD (the old transfer pricing rules) have been consolidated. The arm's length methods, documentation requirements (Form 3CEB), and safe harbour rules are substantively similar but renumbered.
Practical Impact for Filing Season
Update Your Templates: If your firm uses standard templates for engagement letters, representation letters, or tax computation sheets that reference specific rules, update them before July.
Software Updates: Tax filing software providers are expected to release updated versions by June. Check that your software maps old to new rules correctly, especially for TDS return filing.
Client Advisories: Consider sending a brief advisory to clients explaining that the rules have changed in form (numbering) but largely not in substance for AY 2026-27. This reduces confusion when they see unfamiliar rule numbers on their assessment documents.
Due Dates: The due dates for filing returns remain the same under the 2026 Rules:
- 31 July for non-audit cases
- 31 October for audit cases
- 30 November for transfer pricing cases
Areas to Watch
E-verification: The 2026 Rules strengthen e-verification requirements. The old Rule 12AB (electronic verification) has been expanded to cover more scenarios.
Faceless Proceedings: Rules governing faceless assessment, appeal, and penalty proceedings have been consolidated into a single chapter, making them easier to navigate.
Form 10-series: The old Form 10B, 10BB (audit reports for trusts), and Form 10BA (declaration for rent deduction) have new form numbers. CAs handling trust audits should note these changes early.
Our Recommendation
Do not wait until July to familiarise yourself with the 2026 Rules. Spend an hour each week reading through one chapter. By the time filing season hits, you will be comfortable with the new numbering and can focus on substance rather than form.
TaxMarg has indexed the complete IT Rules 2026 with old-to-new rule mapping. Search for any old rule number, and we will show you the corresponding 2026 rule with full text.