20 March,2026 02:30 PM IST | New Delhi | mid-day online correspondent
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The government on Friday notified the Income tax Rules, 2026, paving the way for the implementation of the new Income tax Act, 2025 from April 1, 2026. The updated framework focuses on improving transparency, strengthening compliance and simplifying tax procedures, reported news agency IANS.
The Central Board of Direct Taxes (CBDT) published the rules in the official e-Gazette, replacing earlier provisions and outlining detailed norms for the financial year 2026-27.
Officials said the new rules do not introduce additional taxes but aim to enhance monitoring through stricter disclosures and increased use of digital systems, reported IANS.
Key areas such as capital gains, stock market transactions and non-resident taxation have been brought under tighter reporting requirements to ensure better compliance.
The rules retain the existing structure for House Rent Allowance (HRA) exemptions. Salaried individuals in metro cities like Mumbai, Delhi, Chennai, Kolkata, Bengaluru, Hyderabad, Pune and Ahmedabad can continue to claim up to 50 per cent of their salary as exemption, while the limit remains 40 per cent for other cities, reported IANS.
However, a new requirement mandates taxpayers to disclose their relationship with the landlord in a specified format, adding an extra layer of transparency.
The rules introduce tighter conditions for stock exchanges to qualify as recognised platforms for derivatives trading.
Exchanges must obtain approval from the Securities and Exchange Board of India (SEBI) and maintain detailed transaction records, including client-level information such as PAN and unique identification numbers, reported IANS.
They are also required to preserve audit trails for seven years and submit monthly reports to the tax department, ensuring closer scrutiny of trading activities.
The government has provided clearer guidelines on how to determine whether capital gains are short-term or long-term.
In cases involving converted securities, the holding period of the original asset will be included. Separate provisions have also been outlined for assets declared under the Income Declaration Scheme, 2016, reported IANS.
The rules specify that gains arising from short-term or self-generated assets, such as goodwill, will be treated as short-term capital gains. Other assets will be classified based on their nature and holding period, reported IANS.
The notification follows draft proposals released earlier this year and is part of a broader effort to modernise India's taxation framework.
Officials said the reforms aim to balance ease of compliance with stronger oversight, ensuring a more transparent and efficient tax administration system going forward, reported IANS.
(With inputs from IANS)
