Central government issued notification for Income Tax Rules 2026, now it is easy to file returns

New Delhi, 20 March. The Central Government has issued the notification for Income Tax Rules, 2026 on Friday. This will set the stage for the new Income Tax Act 2025, which is scheduled to come into effect from April 1, 2026. The new income tax rules focus on transparency, more stringent disclosures and better compliance.

The Central Board of Direct Taxes (CBDT) has published the Income Tax Rules, 2026 in the e-Gazette, which replace the earlier provisions and set out a detailed framework for the upcoming financial year 2026-27.

The new rules aim to simplify the process and tighten reporting standards related to capital gains, stock market transactions and NRI tax. The rules follow draft proposals released earlier this year and are part of a broader effort to modernize India’s tax system.

According to the official notification, ‘These changes do not impose any new taxes, but rather focus on better monitoring and transparency, which will require more disclosure and digital tracking.’

The biggest fact in the new rules is House Rent Allowance

The biggest highlight in the Income Tax Rules, 2026 is House Rent Allowance (HRA). Under the new rule, now people of Bengaluru, Hyderabad, Pune and Ahmedabad can also claim HRA on 50 percent of the salary, earlier this limit was only for people living in cities like Mumbai, Delhi, Chennai and Kolkata. However, for other cities this limit still remains at 40 percent.

Now taxpayers will also be required to disclose their relationship with the landlord in a specified form, which will further improve transparency. These rules also prescribe strict conditions for stock exchanges to be recognized as recognized platforms for derivatives trading. Exchanges must obtain approval from SEBI and maintain detailed records of all transactions, including customer-level data such as PAN and unique ID.

They have to maintain an audit trail for seven years and submit monthly reports to the tax department to ensure strict monitoring of trading activities. Additionally, the government has clarified in the new Income Tax Rules 2026 how the holding period of assets will be calculated to determine whether the capital gain is short-term or long-term.

For assets declared under the Income Declaration Scheme, 2016, different rules will apply depending on the type of asset. These rules also clarify taxation on capital gains for certain entities. Profits associated with short-term assets or self-generated assets will be considered short-term, while others will be classified as long-term depending on the nature of the underlying asset.