Income-tax Act 2025
Income-tax Rules 2026 in One Page: What Changed for Individuals
The Income-tax Rules, 2026 replaced the 1962 Rules on 1 April 2026. The new form numbers, salary limits, AIS, PF interest and TDS rules individuals deal with.
myutils.me8 min read
The Income-tax Rules, 2026 were notified on 20 March 2026 and came into force on 1 April 2026, alongside the Income-tax Act, 2025. They replace the Income-tax Rules, 1962. The Act sets out what is taxed; the Rules supply the detail: the forms, the limits for perquisites and allowances, how AIS is compiled and how TDS is reported.
The official notification runs to nearly a thousand gazette pages, most of it about businesses, trusts and procedure. This page pulls out the parts an individual taxpayer or salaried employee meets in practice.
Which rules apply to which year
| Year | Act | Rules |
|---|---|---|
| FY 2025-26 (AY 2026-27), return filed in 2026 | 1961 Act | 1962 Rules |
| Tax Year 2026-27 (April 2026 to March 2027) | 2025 Act | 2026 Rules |
So the Form 16 your employer issued in June 2026 for FY 2025-26 is still a Form 16, and your AY 2026-27 return uses the old limits. Salary paid from April 2026, TDS deducted from April 2026 and the return you file in 2027 follow the new Rules. For the bigger picture, see which law applies to my return or notice.
New numbers for the forms you use
Most forms were renumbered. These are the ones individuals handle most often.
| Old form (1962 Rules) | New form (2026 Rules) | What it is |
|---|---|---|
| Form 16 | Form 130 | Salary TDS certificate from your employer |
| Form 16A | Form 131 | TDS certificate for other payments |
| Form 26AS | Form 168 | Annual Information Statement under rule 245 |
| Form 12BB | Form 124 | Your investment and rent proofs to the employer |
| Form 12B | Form 122 | Salary from a previous employer in the same year |
| Form 12BA | Form 123 | Statement of perquisites, where salary exceeds ₹1,50,000 |
| Forms 15G and 15H | Form 121 | Declaration for no TDS when your tax is nil |
| Form 12BBA | Form 125 | Declaration by a specified senior citizen to the bank |
| Form 13 | Form 128 | Application for a lower or nil TDS certificate |
| Forms 24Q, 26Q, 27Q | Forms 138, 140, 144 | The deductor's quarterly TDS statements |
The ITR forms keep their familiar names. Each form above has its own guide: Form 130, Form 168, Form 124 and Form 121.
Salary: new limits for perquisites and allowances
The largest changes for employees are in rule 15 (valuing perquisites) and rules 279 and 280 (HRA and allowances).
| Item | Old limit | New limit |
|---|---|---|
| HRA at 50% of salary (old regime) | 4 metro cities | 8 cities, adding Bengaluru, Hyderabad, Pune, Ahmedabad |
| Meals or meal vouchers | ₹50 per meal | ₹200 per meal |
| Gifts from the employer | Nil value below ₹5,000 a year | Nil value below ₹15,000 a year |
| Interest-free loans | Up to ₹20,000 | Up to ₹2,00,000 |
| Children's education allowance (old regime) | ₹100 a month per child | ₹3,000 a month per child |
| Hostel allowance (old regime) | ₹300 a month per child | ₹9,000 a month per child |
| Employer car, partly personal, small | ₹1,800 a month + ₹900 for a driver | ₹5,000 a month + ₹3,000 for a driver |
Most of these lower your tax. The car figures raise it. The full list, with a worked HRA example, is in salary rules from April 2026.
Choosing the old regime
Rule 136 says the option under section 202(4) for an individual is exercised in the return of income filed by the due date under section 263(1) for that tax year. For a salaried person, the practical routine stays the same: tell your employer at the start of the year which regime to use for TDS, and make the final choice in your return. See old vs new regime for the comparison and, for the new numbers of deductions like 80C and 80D, old to new section numbers for deductions.
What Form 168 (AIS) must contain
Rule 245 directs the Director General of Income-tax (Systems) to upload Form 168 to your registered account, putting each piece of information there within ninety days from the end of the month in which the department receives it. It lists seven kinds of information:
- tax deducted or collected at source
- specified financial transactions
- payment of taxes
- demands and refunds
- pending proceedings
- completed proceedings
- any other information the Board authorises, including information from other agencies and under tax agreements with other countries
That ninety-day window is why a transaction from last month may not show in AIS yet. Wait before filing feedback on a "missing" entry.
TDS: what changed in the rules you deal with
- Form 121 and its UIN. Under rule 211, you give Form 121 electronically or on paper. The payer gives each declaration a unique number and reports it in the quarterly statement even if no tax was deducted. The tax department can call for the declaration for seven years.
- Form 124 asks one more thing. If your annual rent is above ₹1,00,000, you give the landlord's name, address and PAN, and now your relationship with the landlord, if any (rule 205).
- Section codes. Deductors report payments under four-digit codes listed in the TDS statement forms. If a TDS entry in AIS looks wrong, the code is often the reason; see TDS under sections 392 and 393.
Rules that carried over unchanged in substance
- Taxable PF interest (rule 277). Interest on the part of your own PF contributions above ₹2,50,000 a year (₹5,00,000 where the employer does not contribute) is taxable, and the fund keeps separate taxable and non-taxable accounts from 2021-22, as before.
- Leave travel (rule 278). Two journeys in a block of four calendar years starting with 2022, by the shortest route, with the same fare caps. Where no public transport exists and no rate is prescribed, ₹30 a kilometre.
- Housing perquisite (rule 15). The 10%, 7.5% and 5% of salary rates for employer-owned housing, by city population under the 2011 census, continue.
Amendments since March
The Rules have already been amended several times. Notification 120 of 2026 revised forms for valuers and practitioners, and Notification 121 of 2026 (22 September, the Income-tax (Fifth Amendment) Rules, in force from 1 October) changed the TDS certificate and statement rules, and Forms 132 and 141, for property bought from non-residents. Notification 134 of 2026 (8 October) made the Income-tax (Sixth Amendment) Rules, 2026, with a revised Form 161 for penalty waiver under section 440(2). None of these change the salary limits above. Before relying on a form or limit, check the portal's Latest News page for later amendments.
Your AIS, TIS and tax deposits for each year are what these rules shape. myutils.me brings back those figures, along with ITR status, refunds and demands, for every PAN you add, each time you add a PAN or press Sync. It is an independent app that reads the Income Tax portal for you.
Frequently asked questions
When did the Income-tax Rules, 2026 start?
On 1 April 2026. They were notified on 20 March 2026 and apply to Tax Year 2026-27 onwards.
Do the new Rules apply to my return for AY 2026-27?
No. That return covers FY 2025-26 and is governed by the 1961 Act and the 1962 Rules, so the old HRA cities, meal limit and form numbers apply to it.
Is Form 16 abolished?
For salary paid from April 2026, yes. Your employer issues Form 130 for Tax Year 2026-27, in 2027. Form 16 for FY 2025-26 remained valid.
Where can I read the Rules?
The e-filing portal links the notified Rules from its Latest News page. The text is long; search the PDF for the rule number or form number you need.
Sources
Topics
- Income-tax Rules 2026
- Form 130
- Form 168
- Form 124
- Tax Year 2026-27
- AIS
- Form 26AS
- AY 2026-27
- TIS
- Old Tax Regime
myutils.me
Written by the team behind myutils.me, a free, independent app that brings ITR status, refunds and AIS/TIS for each PAN into one dashboard. Check anything important against the Income Tax portal before you act on it.
