DRAFT INCOME-TAX RULES, 2026
authority and process of approval for expenditure on scientific research under section 45(1)(b) read with section 45(1)(a)(ii) of the
Prescribed authority and process of approval for expenditure on scientific research under section 45(3)(c)
31. Furnishing of statement of particulars in respect of donation and certificate to the donor under section 45(4)(a)
32. Guidelines, form and manner in respect of approval under section 45(4) read with section 45(3)(a) of the Act
33. Conditions subject to which approval is to be granted to a research association under section 45(4) read with section 45(3)(a) of the Act
34. Conditions subject to which approval is to be granted to a university, college or other institution under section 45(4) read with section 45(3)(a) of the Act
35. Prescribed authority, guidelines, form, manner and conditions for approval under section 45(3)(b) of the Act
36. Guidelines for notification of an affordable housing project as a specified business under section 46(11)(d)(vii) and a semiconductor wafer fabrication manufacturing unit as a specified business under section 46(11)(d)(xiii) of the Act
37. Guidelines for approval
58.
59.
Attribution of income taxable under section 67(10) of the Act to the capital assets remaining with the specified entity, under section 72 of the
of
for conversion of rupees into foreign currency and reconversion of foreign currency into rupees for the purpose of computation of capital gains under Section
Conditions for carrying forward or set-off of accumulated loss and unabsorbed depreciation allowance in case of amalgamation
61. Certificate of a Medical Authority in respect of autism, cerebral palsy and multiple disabilities for the purposes of deduction under section 127 and section 154 of the Act
62. Issuance of prescription in respect of certain diseases and ailments for the purpose of deduction under section 128 of the Act
63. Prescribed authority for approval of a University or any educational institution of national eminence for the purpose of section 133 of the Act
64. Guidelines for specifying an association or institution for the purposes of notification under section 133(1)(a)(xxiv) of the Act
Conditions for claim for deduction under section 134 of the Act
66. Furnishing of audit report for claiming deduction under section 46 or 138 or 139 or 140 or 141 or 142 or 143 or 144 of the Act
67. Form of particulars to be furnished along with return of income for claiming deduction under section 144 of the Act
71. Prescribed authority and form of
The prescribed authority and form of certificate to be furnished under section 151(6) and section 152(6) of the Act
73. Relief under section 157(1) of the Act when salary is paid in arrears
133. Modes of payment for the purpose of section 187 of the Act
134. Exercise of option for taxation of royalty income from patent under section 194(1)(Table: Sr. No. 2) of the Act
135. Calculation of net winnings from online games for purpose of section 194(1)(Table: Sl. No. 5)
136. Exercise or withdrawal of option for new tax regime
137. Special provision for payment of tax by certain companies
138. Special provisions for payment of tax by certain persons other than a company
139. Computation of exempt income of specified fund attributable to units held by non-resident under Schedule VI [Table: Sl. Nos. 1 to 4]
140. Determination of income of a specified fund attributable to units held by non-residents under section 210(2) of the Act
141. Computation of exempt income of specified fund, attributable to the investment division of an offshore banking unit under Schedule VI [Table: Sl. Nos. 1 to 4]
142. Conditions referred to in Schedule VI [Note 1(g)(ii)(B)] required to be fulfilled by an investment division of an offshore banking unit
143. Determination of income of a specified fund attributable to the investment division of an offshore banking unit under section 210(3) of the Act
144. Other conditions required to be fulfilled by a specified fund as referred to in Schedule VI [Note 1(g)(i)]
145. Statements under section 221(4), 222(2), section 223(5) and section 224(9)
146. Rules related to application for exercising the option for tonnage tax scheme and other matters related to it
147. Publication and circulation of Board’s order under section 239(3)(a) of the Act
148. Search and Seizure under section 247 of the Act
149. Procedure to requisition services under section 247(5) and to make a reference under section 247(9) of the Act
150. Valuation under section 247(9) of the
151. Requisition of books of account, etc. under section 248 of the Act
Release of remaining assets under section 250 of the
155. Disclosure of information related to assesses under section 258(2) of the Act
156. Prescribed income-tax authority under section 259 of the Act
157. Persons Exempt from Obtaining permanent account number under Section 262
158. Application for allotment of a permanent account number
159. Transactions in relation to which permanent account number is to be quoted or applied for the purposes of section 262(1)(f), 262(10)(c) and 262(10)(e) of the Act
160. Time and manner in which persons referred to in rule 159 shall furnish a statement containing particulars of Form No. 097
161. Transactions for the purposes of section 262(9)(a) of the Act
162. When PAN becomes inoperative under section 262(6) of the Act
163. Conditions for furnishing return of income by persons other than a company or firm referred to in section 263(1)(a)(x) of the Act
164. Forms, eligibility, verification etc. in respect of return of income
165. Furnishing of updated return of income under section 263(6) read with section 263(2) of the Act
166. Conditions for treating a return as defective return under section 263(7) of the Act
167. Form of appeal to Joint Commissioner (Appeals) or Commissioner (Appeals) under section 358 of the Act
168. Prescribed person for verification of return for the purposes of section 265 [Table: Sl. No. 3 and 9] of the Act
169. Form of verification for furnishing information under section 268(1)(c) of the Act
170. Prescribed income-tax authority under section 268(3) for issue of notice under section 268(1) of the Act
171. Forms for report of audit or inventory valuation under section 268(5)
172. Guidelines for the purposes of determining expenses for audit or inventory valuation
173. Jurisdiction of Valuation Officers as per section 2(110) read with section 269 of the Act
174. Day and time for inspection by Valuation Officers etc. as per section 269(3) of the Act
175. Prescribed income-tax authority under section 270(8) of the Act
176. Procedure for faceless assessment, reassessment or recomputation under section 273(1) of the Act
177. Modified return of income in respect of business reorganisation under section 314 of the Act
178. Application under section 288(1)(Table: Sl. No. 11) regarding credit of tax deduction at source
179.
Return of income in respect of block assessment under section 294(1) of the Act
Common Application for registration of non-profit organisation or for approval for the purposes of deduction under section 133(1)(b)(ii)
182. Manner of computation of gains of commercial activities under section 335(e) and section 344
183. Manner of computation of any portion of income applied by a registered non-profit organisation, directly or indirectly, for the benefit of any related person
184. Exercise of options by a registered non-profit organisation under section 341(7) for deemed application under section 341(5)
185. Furnishing of statement by registered non-profit organisation under section 342(1) for accumulating or setting apart any part of its regular income
186. Application under section 342(5) for change of purpose for which income has been accumulated or set apart
188. Report of audit in the case of registered non-profit organisations under section 348
189. Method of valuation for the purposes of computing fair market value of assets and liabilities under section 352(2) for accreted income
190. Furnishing of statement of particulars in respect of donation and certificate to the donor under section 354(1)
191. Mode of service of any order as is referred in section 358(3)(b) of the Act
192. Production of additional evidence before the Joint Commissioner (Appeals) and Commissioner (Appeals) under section 533(2)(x) of the Act
193. Form of appeal and memorandum of cross-objections to Appellate Tribunal under section 362 of the Act
194. Declaration under section 375 of the Act
195. Application under section 376 to defer filing of appeal before the Appellate Tribunal or the jurisdictional High Court of the Act
196. Constitution of Dispute Resolution Committee under section 379 of the Act
197. Application for resolution of dispute before the Dispute Resolution Committee under section 379 of the Act
198. Power to reduce or waive penalty imposable or grant immunity from prosecution or both under section 379 of the Act
199. Definitions
200. Application for obtaining an advance ruling under section 383 of the Act
201. Certification of copies of the advance rulings pronounced by the Board for Advance Rulings under section 384(8) of the Act
202. Form and manner of filing appeal to the High Court on ruling pronounced or order passed by the Board for Advance Rulings under section 389(1) of the Act
203. Credit for tax deducted or collected at source
204. Furnishing of particulars for deduction of tax at source from income under the head “Salaries”
205. Furnishing of evidence of claims by employee u/s 392(5)(b) for deduction of tax from income under the head “Salaries”
206. Rate of exchange for conversion into rupees of income expressed in foreign currency
207. Rate of exchange for the purpose of deduction of tax at source of income payable in foreign currency
208. Furnishing of declaration and evidence of claims by specified senior citizen under section 393(1) [Table: Sl. No. 8(iii)]
Application
210. Condition for no deduction of tax at source from income in respect of units of non-residents referred to in section 393(2) (Table: Sl. No. 10) read with section 393(4) (Table: Sl. No. 15) of the Act
Declaration by person claiming receipt of certain incomes without deduction of tax under section 393(6)
Declaration by a buyer for no collection of tax at source under Section 394(2)
Application for grant of certificates for deduction or collection of income- tax at any lower
or no deduction or collection of
214. Application by the payer for grant of certificate under section 395(2) or 400(3) for determination of appropriate proportion of sum (other than Salary), payable to non-resident, chargeable in case of the recipients
215. Certificate of tax deducted or collected at source to be furnished under section 395(4)
Application for allotment of a tax deduction and collection account number
Conditions under section 397(2)(c) for non-application of deduction of tax at higher rate in case of non-residents
218. Time and mode of payment to Government account of tax deducted or collected at source or tax paid under Section 392(2)(a)
219. Statement of deduction or collection of tax at source under Section 397(3)(b)
220. Furnishing of information for payment to a non-resident, not being a company, or to a foreign company
221. Form for furnishing certificate of accountant under Section 398(2)
Notice of Demand under section 289 of the Act
223. Estimate of advance tax under section 407(8) of the Act
224. Form of statement under section 413 or section 414 of the Act
225. Procedure for recovery of tax for the purposes of section 413 and 475 of the Act
226. Tax recovery officer to exercise or perform certain powers and functions of an Assessing Officer under section 413 of the Act
227.
authority for tax clearance certificates under section 420 of the
228. Forms and certificates for the purpose of section 420 of the Act
Production of certificate under section 420 of the Act
230. Refund claim under section 434 of the Act
231. Form of application under section 440 of the Act
232. Service of notice, summons, requisition, order and other communication under section 501 of the Act
Form of statement to be furnished by producers of cinematograph films or persons engaged in specified activity
of statement of financial transaction
ARRANGEMENT OF RULES
270. Determination of income, being partly from agricultural and partly from business
271. Income from manufacture of rubber, coffee and tea
272. Deduction in respect of expenditure on production of feature films
273. Deduction in respect of expenditure on acquisition of distribution rights of feature films
274. Guidelines for investment fund for availing benefit under section 9(12) read with Schedule I
275. Approval of the investment fund at its option for the purposes of section 9(12)
276. Statement to be furnished by the eligible investment fund under section 9(12) read with Schedule I
277. Calculation of taxable interest relating to contribution in a provident fund or recognised provident fund, exceeding specified limit
278. Conditions for the purpose of Schedule III (Table: Sl. No. 8) of the Act
279. Limits for the purposes of Schedule III (Table: Sl.No 11) of the Act
280. Prescribed allowances for the purposes of Schedule III (Table: Sl No. 12 & 13) of the Act
281. Circumstances and conditions for the purposes of Schedule III (Table: Sl.No 16) of the Act
282. Notification of pension fund and other conditions to be satisfied by the pension fund
283. Computation of minimum investment and exempt income for the purposes of Schedule V [Table: Sl. No. 7]
284. Conditions for the purpose of Schedule VI [Table: Sl. No. 5] of the Act
285. Computation of exempt income in the nature of capital gains in connection with relocation of original fund etc.
286. Requirements for approval of a fund for welfare of employees and their dependents under Schedule VII [Table: Sl. No. 2]
287. Percentage of Government Grant for considering any university, hospital, or any other institution, as substantially financed by the Government for the purposes of Schedule VII [Table: Sl. No. 17 and 18]
288. Guidelines for setting up an Infrastructure Debt
VII [Table: Sl. No. 46]
289. Rules for functioning of an electoral trust
290. Report of audit of accounts to be furnished under Schedule IX r. w. section 48 of the Act
291. Report of audit of accounts to be furnished under Schedule X r. w. section 49 of the Act
of Income-tax having jurisdiction over the sponsor after approval of scientific research programme under section 45(3)(c) of
for entering into an agreement with the Department of Scientific and Industrial research for cooperation in In-house research development facility and for audit of accounts maintained by the
12. Report to be submitted by the prescribed authority to the Chief Commissioner of Income-tax having jurisdiction over the company
13. Report from an accountant to be furnished under section 45(2) of the Act relating to inhouse scientific research and development facility
14. Order of approval of in-house research and development facility under section 45(2) of the Act
15. Statement to be filed by research association, university, college or other institution or company (“donee”) under section 45(4)(a) of the Act
16. Certificate of donation under section 45(4)(a) of the Act
17. Application for approval of a company under section 45(3)(b) and of a research association, university, college or other institution under section 45(4)(b) of the Act
18. Application for notification of affordable housing project as specified business under section 46 of the Act
19. Application for notification of a semiconductor wafer fabrication manufacturing unit as specified business under section 46 of the Act
20. Application for approval of agricultural extension project under section 47(1)(a) of the
21. Form for notification of agricultural extension project under section 47(1)(a) of the Act
22. Application for approval of skill development project under section 47(1)(b) of the Act
23.
of
24. Audit Report under section 59 of the Act
of
Report of an accountant to be furnished by an assessee under Section 77(4) of the Act relating to the computation of capital gains in the case of slump sale
29. Certificate from the principal officer of the amalgamated company and duly verified by an accountant regarding achievement of the prescribed level of production and continuance of such level of production in subsequent years
30. Certificate of the medical authority for certifying ‘person with disability’, ‘severe disability’, ‘autism’, ‘cerebral palsy’ and ‘multiple disability’ for purposes of section 127 & section 154 of the Act
31. Declaration to be filed by the assessee claiming deduction for rents paid under section 134 of the Act
32. Audit report under sections 46, 138, 139, 140(8), 141, 142, 143, 144 of the Act
33. Particulars to be furnished under section 144 of the Act
34. Report for deduction in respect of additional employee cost under section 146 of the Act
35. Report for deduction in respect of income of Offshore Banking Units and Units of International Financial Services Centre under section 147(4)(a) of the Act
36. Certificate under section 151(5) of the Act for Authors of certain books in receipt of Royalty Income 553
37. Certificate under section 152(5) of the Act for Patentees in receipt of royalty income
38. Certificate of foreign inward remittance
39. Form for claiming relief under section 157(1) of the Act
40. Exercise of option under rule 21AAA(1) of the Act
41. Information to be provided under section 159(8) of the Act
42. Application for Certificate of residence for the purposes of an agreement under section 159(1) and 159(2) of the Act
45. Intimation of settlement of dispute regarding foreign tax for which credit has not been claimed
46. Exercise of option for determination of arm’s length price (ALP) under section 166(9)
48.
55. Form of application for an assessee, resident in India, seeking to invoke mutual agreement procedure provided for in agreements with other countries or specified territories
56. Information and document to be furnished by the person who is a
entity under section 171(4) of
57. Intimation by a designated constituent entity, resident in India, of an international group, for the purposes of section 171(4) of the Act
58. Intimation by a constituent entity, resident in India, of an international group, the parent entity of which is not resident in India, for the purposes of section 511(1) of the Act
59. Report by a parent entity or an alternate reporting entity or any other constituent entity, resident in India, for the purposes of section 511(2) or section 511(4) of the Act
60. Intimation on behalf of the international group for the purposes of section 511(5) of the Act.
for making the reference to the Commissioner of Income-tax by the Assessing Officer under section 274(1) of the Act
63.
Form for making reference to the Approving Panel and for recording the satisfaction by the Commissioner before making a reference to the Approving Panel under section 274(4) of the Act
65. Form for opting for taxation of income by way of royalty in respect of patent
66. Computation of Book Profit for the purposes of section 206(1) of the Act
67. Report under section 206(2) of the the Act for Computation of Adjusted Total Income and Alternate Minimum Tax for the purposes of section 206(2) of the Act
68. Statement of exempt income under Schedule VI [Table: Sl. Nos. 1 to 4]
69. Statement of income of a Specified fund eligible for concessional taxation under section 210(2) of the Act
70. Annual Statement of exempt income and income taxable at concessional rate for an investment division of an offshore banking Unit
71. Verification by an Accountant under rule 142
72. Statement of income paid or credited by a securitization trust to be furnished under section 221 of the Act
73. Statement of income distributed by a securitisation trust to be provided to the investor under section 221 of the Act
Fund to be furnished under section 222 of the
75. Statement of income paid or credited by Venture Capital Company or Venture Capital Fund to be provided to the person who is liable to tax under section 222 of the Act
of
79. Statement of income Statement of
or
by investment fund to be furnished under section 224 of the Act
80. Application for exercising/renewing option for the tonnage tax scheme under section 231(1) or 231(10) of the Act
81.
Quarterly statement to be furnished by specified fund or stock broker in respect of a non-resident referred to in rule 114AAB for the quarter of of (Financial Year)
Application for allotment of PAN - (For an Indian Company/an Entity incorporated in India/an Unicorporated Entity formed in India)
Application for allotment of PAN- (for an Entity incorporated outside India/an Unincorporated Entity formed outside India)
97. Form for declaration to be filed by any person (other than a company or firm) or a foreign company covered by rule 158(2), who does not have a permanent account number and who enters into any transaction specified in rule 158 of the Act
Statement containing particulars of declaration received in Form No. 95
Appeal to the Joint Commissioner (Appeals) or the Commissioner of Income-tax (Appeals)
100. Audit report under section 268(5)(i) of the Act
101. Inventory Valuation report under section 268(5) of the Act
102. Application under Section 288(1) [Table Sl. No. 11] for credit of tax deduction at source
103. Notice of demand under section 289 of the Act
Application for provisional registration or provisional approval
105. Application for registration of non-profit organisation under section 332 or approval for deduction under section 133(1)(b)(ii)
106. Order for provisional registration u/s 332 or provisional approval u/s 354 Rejection of application
107. Order for grant of registration under section 332 or approval under section 354 or rejection of application or cancellation of registration or approval granted
108. Exercise of option under section 341(7) in respect of amount applied for charitable or religious purposes 809
109. Statement of accumulation or setting apart of income under section 342(1) of the Act 810
110. Application for change of purpose of accumulation or setting apart of income under section 342(5) of the Act 812
111. Order under section 342(6) on the request for change of purpose of accumulation or setting apart of income 814
112. Audit report under section 348 in the case of a registered non-profit organisation (NPO) 815
113. Statement or Correction Statement to be filed by Donee under section 354(1) of the Act 841
114. Certificate of donation under section 354(1)(g) of the Act 843
115. Form of appeal to the Income-tax Appellate Tribunal 845
116. Form of memorandum of cross-objections to the Appellate Tribunal 850
117. Declaration under section 375(1) of the Act, to be made by an assessee claiming that identical question of law is pending before the High Court or the Supreme Court 854
118. Application under section 376-In the High Court of ……… or Income- tax Appellate Tribunal….. 857
119. Application to the Dispute Resolution Committee
120. Form of application for obtaining an advance ruling under section 383(1) of the Act
121. Declaration under section 393(6) for receipt of certain incomes without deduction of tax 869
122. Form for furnishing details of income under section 392(4)(a) of the Act 873
123. Statement showing particulars of perquisites, other fringe benefits or amenities and profits in lieu of salary with value thereof
124. Statement showing particulars of claims by an employee for deduction of tax under section 392(5)(b) of the Act
125. Declaration to be furnished by Specified Senior Citizen under Section 393(1) [Table: Sl. No. 8(iii)]
126. Application by a person specified in rule 209 for a certificate under section 395(1) of the Act, for receipt of certain sums without deduction of tax 884
127. Declaration under section 394(2) of the Act to be made by a buyer for obtaining goods without collection of tax 888
128. Application for issuance of certificate for lower/nil deduction of income-tax and lower collection of income-tax under section 395(1) and 395(3) of the Act
129. Application by a person for a certificate under section 395(2) and 400(3) of the Act for determination of appropriate proportion of sum (other than salary) payable to non-resident, chargeable to tax in case of the recipient.
130. Certificate under section 395 of the Act for tax deducted at source on salary paid to an employee under section 392 or pension or interest income of specified senior citizen under section 393(1) [Table: Sl. No. 8(iii)]
131. Certificate under section 395(4) of the Act for tax deducted at source
132. Certificate under section 395(4) of the Act for tax deducted at source
133. Certificate under section 395(4) of the Act for tax collected at source
134. Form for application for allotment of Tax Deduction and Collection Account Number [TAN] under section 397 of Act [In the case of Government Entity]
135. Form for application for allotment of Tax Deduction and Collection Account Number [TAN] under section 397 of Act [For entities other than government entity]
136. Application for allotment of Accounts Office Identification Number (AIN)
137. TDS/TCS Book Adjustment Statement
138. Quarterly statement of deduction of tax under section 397(3)(b) of the Act in respect of salary paid to employee under section 392, or income of specified senior citizen under section 393(1) [Table: Sl. No. 8(iii)], for the quarter ended ……….. (June/September/ December/March) ……. (Tax Year)]
139. Form to be filed by the deductor, if he claims refund of sum paid under Chapter XIX of the Act
140. Quarterly statement of deduction of tax under section 397(3)(b) of the Act in respect of payments made other than salary for the quarter ended… (June/September/December/ March) … (Tax Year)]
141. Challan-cum-statement of deduction of tax under section 393(1) [Table Sl. No. 2(i), 3(i), 6(ii) & 8(vi)]
142. Quarterly statement of tax deposited in relation to transfer of virtual digital asset under section 393(1) [ Table: S. No. 8(vi)] to be furnished by an Exchange for the quarter ending ……. June/September/December/March of Tax Year
143. Quarterly statement of collection of tax at source under Section 397(3)(b) of the Act for the quarter ended………………………….. (June/September/December/March) (TaxYear)
144. Quarterly statement of deduction of tax under section 397(3)(b) of the Act in respect of payments other than salary made to non- residents for quarter ended………………………… (June/September/December/March) ……………. (Tax Year)]
145. Information to be furnished for payments to a non-resident not being a company, or to a foreign company
146. Certificate of an accountant for payments to a non-resident, not being a company or to a foreign company
147. Quarterly statement to be furnished by an authorised dealer in respect of remittances made for the quarter of of (Tax Year)
148. Quarterly statement to be furnished by a unit of an International Financial Services Centre, as referred to in section 147(1)(b), in respect of remittances, made for the quarter of ........... of (Tax Year)
149. Form for furnishing accountant certificate under section 398(2) of the Act
150. Form for furnishing accountant certificate under section 398(2) of the Act
151. Notice of demand under section 289 of the Act for payment of advance tax under section 407(2)or 407(5)
152. Intimation to the Assessing Officer under section 407(8) regarding the notice of demand under section 289 of the Income-tax Act, 2025 for payment of advance tax under section 407(2)/407(5) of the Act
153. Certificate under section 413 or 414 of the Act 1024
154. Form of undertaking to be furnished under section 420(1) of the Act 1027
155. No Objection Certificate for a person not domiciled in India under section 420(1) of the Act 1029
156. Form for furnishing the details under section 420(3) of the Act 1030
157. Form for furnishing the certificate under section 420(4) of the Act 1032
158. Application for Certificate under section 420(5) of the Act. 1034
159. Clearance Certificate under section 420(5) of the Act 1036
160. Application by a person under section 434 of the Act for refund of tax deducted 1038
161. Form of application under section 440(2) of the Act 1042
162. Annual Statement under section 505 of the Act 1044
163. Information and Documents to be furnished by an Indian concern under section 506 of the Act 1048
164. Statement to be furnished under section 507 of the Act by a person carrying on production of a cinematograph film or engaged in specified activity or both
165. Statement of Specified Financial Transactions under section 508 (1) of the Act
166. Statement of Reportable Account under section 508 (1) of the Act
167. Statement to be
under section 509 of the Act
of application for registration as authorised
172. Report from an accountant to be furnished for the purpose of section 9(12) [Schedule I: Paragraph 1(4)] regarding fulfilment of certain conditions by an eligible investment fund
173. Statement to be furnished by an eligible investment fund to the Assessing Officer under section 9(12) [Schedule I: Paragraph 1(4)]
174. Application for notification under Schedule V [Table: Sl. No.7.Note 5(a)(iii)(D)] (Pension Fund)
175. Intimation by Pension Fund of investment under Schedule V [Table: Sl. No. 7] (within one month from the end of the quarter ending on 30th June, 30th September, 31st December and 31st March of the financial year)
176. Certificate of accountant in respect of compliance to the provisions of Schedule V [Table: Sl. No. 7] by the notified Pension Fund
of
Application for grant of approval to a fund referred to in Schedule VII [Table: Sl. No. 2]
181. Audit report under rule SVIII.R17CA(12) in the case of the electoral trust
Audit Report under paragraph 2 of Schedule X
Form of nomination/modifying nominations for Provident/Gratuity Fund
Form for maintaining accounts of subscribers to a recognised provident fund
Application for recognition of a Recognised provident fund
187. Appeal against refusal to grant recognition/approval or withdrawal of recognition/approval from a Provident Fund, Superannuation Fund, or Gratuity Fund
188. Application for Approval for Superannuation Fund/Gratuity Fund
189. Guidelines for approval under Schedule XV (1)(z)(i) and (1)(z)(ii) of the Act
190. Application for approval of mutual funds investing in the eligible issue of public companies under section Schedule XV: Paragraph 1(z)(ii) of the Act
Draft Income-tax Rules, 2026
Rule 1
PRELIMINARY
Short title and commencement.
(1)These rules may be called the Income-tax Rules, 2026.
(2)They shall come into force on the 1st day of April, 2026.
Rule 2
Definitions.
(1)In these rules, unless the context otherwise requires,—
(a)"Act" means the Income-tax Act, 2025 (30 of 2025);
(b)"authorised bank" means any bank as may be appointed by the Reserve Bank of India as its agent under the provisions of sub-section (1) of section 45 of the Reserve Bank of India Act, 1934 (2 of 1934);
(c)"Chapter", "section" and "Schedule" means respectively Chapter and section of, and Schedule to, the Act.
(2)All references to "Forms" in these rules shall be construed as references to the forms set out in Appendix III hereto.
Rule 3
Prescribed arrangements for declaration and payment of dividends within India.
The arrangements referred to in section 2(42) to be made by a company for the declaration and payment of dividends (including dividends on preference shares) within India shall be as follows:
(a)The share-register of the company for all shareholders shall be regularly maintained at its principal place of business within India, in respect of any tax year from a date not later than the 1st day of April of such year;
(b)The general meeting for passing the accounts of the tax year and for declaring any dividends in respect thereof shall be held only at a place within India;
(c)The dividends declared, if any, shall be payable only within India to all shareholders.
Rule 4
Conditions that a stock exchange is required to fulfil to be notified as a recognised stock exchange for the purposes of section 2(92) of the Act. For the purposes of section 2(92) of the Act, a stock exchange shall fulfil the following conditions in respect of trading in derivatives, namely:-
(a)the stock exchange shall have the approval of the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992 (15 of 1992) in respect of trading in derivatives and shall function in accordance with the guidelines or conditions laid down by the Securities and Exchange Board of India;
(b)the stock exchange shall ensure that the particulars of the client (including unique client identity number and Permanent Account Number) are duly recorded and stored in its databases;
(c)the stock exchange shall maintain a complete audit trail of all transactions (in respect of cash and derivative market) for a period of seven tax years on its system;
(d) the stock exchange shall ensure that transactions (in respect of cash and derivative market) once registered in the system are not erased;
(e)the stock exchange shall ensure that the transactions (in respect of cash and derivative market) once registered in the system are modified only in cases of genuine error;
(f)the stock exchange shall maintain data regarding all transactions (in respect of cash and derivative market) registered in the system which have been modified and submit a monthly statement in Form No. 1 to the Director General of Income-tax (Systems), within fifteen days from the last day of each month to which such statement relates.
Rule 5
Procedure for notification of a recognised stock exchange for the purposes of section 2(92) of the Act.
(1)An application for notification of a stock exchange as a recognised stock exchange for the purposes of section 2(92) of the Act may be made to the Member (Income Tax), Central Board of Direct Taxes, North Block, New Delhi - 110001
(2) The application referred to in sub-rule (1) shall be accompanied with the following documents, namely :-
(a)approval granted by Securities and Exchange Board of India for trading in derivatives;
(b) up-to-date rules, bye-laws and trading regulations of the stock exchange;
(c)confirmation regarding fulfilling the conditions referred to in rule 4(b)] to 4(f)
(d) such other information as the stock exchange may like to place before the Central Government.
(3)The Central Government may call for such other information from the applicant as it deems necessary for taking a decision on the application.
(4)The Central Government, after examining the information furnished by the stock exchange under sub-rule (2) or sub-rule (3), shall notify the stock exchange as a recognised stock exchange for the purposes of section 2(92) of the Act or issue an order rejecting the application before the expiry of six months from the end of the month in which the application is received.
(5)The notification referred to in sub-rule (4) shall be effective until the approval granted by the Securities and Exchange Board of India is withdrawn or expired, or the notification is rescinded by the Central Government.
Rule 6
Method of determination of period of holding of capital assets in certain cases.
(1) For the purposes of section 2(101)(c)(D), the period for which such capital asset is held by an assessee, shall be determined in accordance with the provisions of this rule.
(2) For the capital asset mentioned in column (B) of the Table below, the period for which the capital asset is held by the assessee shall be determined in accordance with column (C) thereof:
1. shares or debentures of a company, which becomes the property of the assessee under the circumstances mentioned in section 70(1)(z) of the Act
the period of holding shall include the period for which the bond, debenture, debenture-stock or deposit certificate, as the case may be, was held by the assessee prior to the conversion.
2. capital asset declared under the Income Declaration Scheme, 2016 (i) in the case of an immovable property, the period for which such property is held is to be reckoned from the date on which such property is acquired, if the date of acquisition is evidenced by a deed registered with any authority of a State Government.
(ii)in any other case, the period for which such asset is held shall be reckoned from the 1st day of June, 2016
3. capital asset which became the property of the Indian subsidiary company in consequence to conversion of a branch of a foreign company referred to in section 219(1).
the period of holding shall include the following:
(i)the period for which the asset was held by the said branch of the foreign company
(ii)the period for which the asset was held by the previous owner, if any, who has acquired the capital asset by a mode of acquisition referred to in section 73(1) [Sl.No1. Column (A)] or section 219(1)
(3) In case of the amount which is chargeable to income-tax as income of a specified entity under section 67(10) under the head “Capital gains”:
(a)the amount or a part of it shall be considered to be from transfer of short-term capital asset, if it is attributed to, -
(i)the capital asset which is short-term capital asset at the time of taxation of amount under section 67(10)
(ii)capital asset forming part of block of asset; or
(iii)capital asset being self-generated asset and self-generated goodwill as defined in section 67(11)
(b) the amount or a part of it shall be considered to be from transfer of long-term capital asset or assets, if it is attributed to capital asset which is not covered by clause (i) and is long-term capital asset at the time of taxation of amount section 67(10).
Rule 7
Guidelines for notification of zero coupon bond
(1) An application by an entity being an infrastructure capital company or infrastructure capital fund or infrastructure debt fund or a public sector company under section 2(112) of the Act for notification of any zero coupon bond proposed to be issued by it shall be made in Form No.2 at least three months before the date of issue of such bond.
(2)An application under sub-rule (1) shall not be made for notification of a bond which is to be issued beyond a period of two financial years following the financial year in which such application is made.
(3) An application under sub-rule (1) shall be disposed of within a period of six months from the end of the month in which such application was received.
(4)Every application, under sub-rule (1), shall be accompanied by the following documents, namely:—
(a)where the application is made by any infrastructure capital company or infrastructure debt fund or a public sector company, being a Government company defined under section 2(45) of the Companies Act, 2013 (18 of 2013), a copy of certificate of incorporation under the Companies Act, 2013 (18 of 2013);
(b) where the application is made by any infrastructure capital fund, a copy of the trust deed registered under the provisions of the Registration Act, 1908 (16 of 1908);
(c)where the application is made by a public sector company, being any corporation, established by or under any Central or State or Provincial Act, a copy of the relevant Act.
(5) The Central Government, while specifying a zero coupon bond by notification in the Official Gazette shall satisfy itself that the following conditions are fulfilled, namely:—
(a)the period of life of the bond is not less than ten years and not more than twenty years;
(b) the entity proposing to issue a zero coupon bond has an investment grade rating from at least two credit rating agencies registered under section 12(1A) of the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(c)necessary arrangement has been made by the said entity for listing the zero coupon bond in a recognised stock exchange in India;
(d) the entity shall furnish an undertaking along with the application that the money realised on issue of the zero coupon bond shall be invested by it in the following manner, namely:—
(i)twenty-five per cent or more of such realisation before the end of the financial year immediately following the financial year in which the bond is issued;
(ii)the balance of such realisation within a period of four financial years immediately following the financial year in which the bond is issued;
(e)where the application is made by an infrastructure debt fund, such fund shall along with the application, submit an undertaking that a sinking fund shall be maintained for the interest which will accrue on all the zero coupon bonds subscribed and such interest shall be invested in Government security as defined under section 2(f) of the Government Securities Act, 2006 (38 of 2006).
(6)The Central Government, after having satisfied itself about fulfilling of the conditions referred to in this rule, shall specify the bond, by notification in the Official Gazette, giving therein, inter alia, the following particulars, namely:—
(a) name of the bond;
(b)period of life of the bond;
(c) the time schedule of the issue of the bond;
(d) the amount to be paid on maturity or redemption of the bond;
(e) the discount;
(f) the number of bonds to be issued.
(7) The Central Government may, if the applicant fails to fulfil the conditions referred to in this rule, reject the application for notification after giving an opportunity of being heard.
(8) Every entity shall submit within two months from the end of each financial year referred to in sub-rule (5)(d), a certificate from an accountant as defined in section 515(3)(b) of the Act, specifying the amount invested in each year in Form No. 3.
(9) The Central Government shall have the power to withdraw the notification if the applicant fails to fulfil any of the conditions referred to in this rule.
(10) For the purposes of this rule,—
(i) "discount" and "period of life of the bond" shall have the same meanings respectively assigned to them in section 32(d)(i) and 32(d)(ii) of the Act respectively;
(ii) "infrastructure debt fund" shall mean the infrastructure debt fund notified by the Central Government in the Official Gazette under Schedule VII[Table: 46] of the Act.
Rule 8
Computation of period of stay in India for an Indian Citizen being a member of the crew of a foreign bound ship.
(1) For the purposes of section 6(6) in case of an individual, being a citizen of India and a member of the crew of a foreign bound ship, the period or periods of stay in India in respect of an eligible voyage, shall not include the period computed under sub-rule (2).
(2) The period referred to in sub-rule (1) shall be the period beginning on the date entered into the Continuous Discharge Certificate in respect of joining the ship by the said individual for the eligible voyage and ending on the date entered into the Continuous Discharge Certificate in respect of signing off by that individual from the ship in respect of such voyage.
(3) For the purposes of this rule, —
(a) “Continuous Discharge Certificate” shall have the meaning assigned to it in the Merchant Shipping (Continuous Discharge Certificate-cum-Seafarer's Identity Document) Rules, 2001 made under the Merchant Shipping Act, 1958 (44 of 1958);
(b) “eligible voyage” shall mean a voyage undertaken by a ship engaged in the carriage of passengers or freight in international traffic where —
(i) for the voyage having originated from any port in India, has as its destination any port outside India; and
(ii) for the voyage having originated from any port outside India, has as its destination any port in India.
Rule 9
Determination of income in case of non-residents.
In any case in which the Assessing Officer is of opinion that the actual amount of the income accruing or arising to any non-resident person whether directly or indirectly, through or from -
(a) any asset or source of income in India;
(b) any property in India;
(c) any business connection in India, or
cannot be definitely ascertained, the amount of such income for the purposes of assessment to income-tax may be calculated: —
(i) at such percentage of the turnover so accruing or arising as the Assessing Officer may consider to be reasonable;
(ii) on any amount which bears the same proportion to the total profits and gains of the business of such person (such profits and gains being computed in accordance with the provisions of the Act), as the receipts so accruing or arising bear to the total receipts of the business; or
(iii) in such other manner as the Assessing Officer may deem suitable.
Rule 10
Definition of terms for rule 11 and rule 12.
(1) For the purposes of rule 11 and rule 12
(a) “accountant” __
(A) means an accountant referred to in section 515(3)(b) of the Act, who fulfils the following conditions, namely: —
(i) if he is pursuing the profession of accountancy individually or is a valuer then(a) he has professional experience of not less than ten years; and
(b) his annual receipt in the year preceding the year in which cost certification is undertaken, from the exercise of profession, exceeds 50 lakhs;
(ii) if he is a member or partner in any entity engaged in rendering accountancy or valuation services then, the annual receipt of the entity in the year preceding the year in which cost certification is undertaken exceeds 3 crores;
(B) includes any person recognised for undertaking cost certification by the Government of the country where the associated enterprise is registered or incorporated or any of its agencies, who fulfils the following conditions, namely: —
(i) the condition referred to in (a)(A)(i) and (ii);
(ii) if he is a member or partner in any entity engaged in rendering accountancy or valuation services then, the entity or its affiliates have presence in more than two countries;
(b) “connected person” shall have the meaning as assigned to it in section 184(5);
(c) “right of management or control” shall include the right to appoint majority of the directors or to control the management or policy decision exercisable by a person or persons acting individually or together, directly or indirectly, including by virtue of shareholding or management rights or shareholders agreements or voting agreements or in any other manner;
(d) “telegraphic transfer buying rate” shall have the meaning as assigned to it in rule 207;
(e) “observable price” in respect of a share quoted on a stock exchange shall be the higher of the following: —
(i) the average of the weekly high and low of the closing prices of the shares quoted on the said stock exchange during the six months period preceding the specified date; or
(ii) the average of the weekly high and low of the closing price of the shares quoted on the said stock exchange during the two weeks preceding the specified date;
(f) “book value of the liabilities” means the value of liabilities as shown in the balancesheet of the company or the entity, as the case may be, excluding the paid-up capital in respect of equity shares or members' interest and the general reserves and surplus and security premium related to the paid-up capital;
(g) “specified date” shall have the meaning as assigned to it in section 9(10)(d);
(h) terms “merchant banker” and “recognised stock exchange” shall have the meaning as assigned to them in rule 56;
(i) “balance sheet”, —
(i) in relation to an Indian company, means the balance-sheet of such company (including the notes annexed thereto and forming part of the accounts) as drawn up on the specified date which has been audited under the laws relating to companies in force; and
(ii) in any other case, it means the balance-sheet of the company or the entity (including the notes annexed thereto and forming part of the accounts) as drawn up on the specified date and submitted to the relevant authority outside India under the laws in force of the country in which the foreign company or the entity is registered or incorporated:
(iii) Where finalization of accounts is pending as on specified date for purposes of sub-clauses (i) and (ii), it means an interim balance-sheet drawn up as on the specified date and approved by the board of directors of the company or an equivalent body in case of any other entity:
(iv) Where the specified date is the date referred to in section 9(10)(d) (iii), it means the balance sheet as drawn up on the specified date and certified by an accountant;
(j) “foreign company or entity” means a company or entity registered or incorporated outside India.
Rule 11
Fair market value of assets in certain cases.
(1) The fair market value of asset, tangible or intangible, as on the specified date, held directly or indirectly by a foreign company or entity, for the purposes of section 9(2) shall be computed as per this rule with reference to the specified date.
(2) Where the asset is a share of an Indian company listed on a recognised stock exchange on the specified date, the fair market value of the share shall be the observable price of such share on the stock exchange so, however, that __
(a) if the share is held as part of the shareholding which confers, directly or indirectly, any right of management or control in the said company, the fair market value of the share shall be determined using the following formula, namely: —
Fair market value = (A+B)/C
Where:
A = the market capitalisation of the company on the basis of observable price of its shares quoted on the recognised stock exchange;
B = the book value of liabilities of the company;
C = the total number of outstanding shares;
(b) if, on the specified date, the share is listed on more than one recognised stock exchange, the observable price of the share shall be computed with reference to the recognised stock exchange which records the highest volume of trading in the share during the tax year.
(3) Where the asset is a share of an Indian company not listed on a recognised stock exchange on the specified date, the fair market value of the share shall be: -
(a) the fair market value as determined by a merchant banker or an accountant as per any internationally accepted valuation methodology for valuation of shares on arm's length basis; and
(b) increased by the liability, if any, considered in such determination as per clause (a).
(4) Where the asset is an interest in a partnership firm or an association of persons, its fair market value shall be determined in the following manner, namely: —
(a) the value of such firm or association of persons, shall be determined by a merchant banker or an accountant as per any internationally accepted valuation methodology as increased by the liability, if any, considered in such determination;
(b) the value so computed in clause (a) as is equal to the amount of its capital shall be allocated among its partners or members in the same proportion in which the capital has been contributed by them;
(c) the residue of the value shall be allocated among the partners or members as per the agreement of partnership firm or association of persons for distribution of assets in the event of dissolution of the firm or association;
(d) in the absence of agreement, as specified in clause (c), the residual value shall be allocated in proportion in which the partners or members are entitled to share profits;
(e) the sum total of the amount so allocated as per clauses (a) to (d) to a partner or member shall be treated as the fair market value of the interest of that partner or member in the firm or the association of persons, as the case may be.
(5) The fair market value of the asset other than those referred to in sub-rules (2), (3) and (4) shall be the price it would fetch if sold in the open market as determined by a merchant banker or an accountant and increased by the liability, if any, considered in such determination.
(6) The fair market value of all the assets of a foreign company or an entity on the specified date if conditions specified in column B of the Table below are fulfilled shall be determined as per column C: —
Sl. No. Conditions
TABLE
Fair Market Value
B C
(a) Where the transfer of share of, or interest in, the foreign company or entity is between the persons who are not connected persons, for the purpose of such transfer
(b) Where the share of the foreign company or entity is listed on a stock exchange on the specified date
Fair market value of all assets = A+B
Where:
A = Market capitalization of the foreign company or entity computed on the basis of the full value of consideration for transfer of the share or interest;
B = book value of the liabilities of the company or the entity as on the specified date as certified by a merchant banker or an accountant;
Fair market value of all the assets = A+B
Where:
A = Market capitalization of the foreign company or entity computed on the basis of the observable price of the share on the stock exchange where the share of the foreign company or the entity is listed:
B = book value of the liabilities of the company or the entity as on the specified date;
(c) Where the share is listed on more than one stock exchange on the specified date
(d) Where the share in the foreign company or entity is not listed on a stock exchange on the specified date
Fair market value of all the assets = A+B
Where:
A = Market capitalization of the foreign company or entity computed on the basis of the observable price of the share on the stock exchange which records the highest volume of trading in the share during the period considered for determining the price. B = book value of the liabilities of the company or the entity;
Fair market value of all the assets = A+B
Where:
A = fair market value of the foreign company or the entity as on the specified date as determined by a merchant banker
or an accountant as per the internationally accepted valuation methodology;
B = value of liabilities of the company of the entity if any, considered for the determination of fair market value in A.
(7) Where fair market value has been determined on the basis of any interim balance sheet referred to in rule 10(2)(i)(iii), then the fair market value shall be appropriately modified after finalisation of the relevant financial statement as per the applicable laws and all the provisions of this rule and rules 11 and 234 shall apply accordingly.
(8) For determining the fair market value of any asset located in India, being a share of an Indian company or interest in a partnership firm or association of persons, all the assets and business operations of the said company or partnership firm or association of persons shall be taken into account whether such assets or business operation are located in India or outside.
(9) The rate of exchange for the calculation in foreign currency, of the value of assets located in India and expressed in rupees shall be the telegraphic transfer buying rate of such currency as on the specified date.
Rule 12
Determination of income attributable to assets in India.
(1) The income from transfer outside India of a share of, or interest in, a company or an entity referred to in section 9(2) attributable to assets located in India, shall be determined with reference to specified date, by the following formula: —
Where:
A = Income from the transfer of the share of, or interest in, the company or the entity computed as per the provisions of the Act, as if, such share or interest is located in India;
B = Fair Market Value of assets located in India as on the specified date from which the share or interest referred to in A derives its value substantially, computed as per rule 11;
C = Fair Market Value of all the assets of the company or the entity as on the specified date, computed as per rule 11.
(2) If the transferor of the share of, or interest in, the company or the entity referred to in subrule (1) fails to provide the information required for the application of the formula in the said sub-rule, then the income from the transfer of such share or interest shall be determined in such manner as the Assessing Officer may deem suitable.
(3) The transferor of the share of, or interest in, a company or an entity referred to in sub-rule (1), shall obtain and furnish along with the return of income a report in Form No. 4 duly signed and verified by an accountant providing the basis of the apportionment as per the formula and certifying that the income attributable to assets located in India has been correctly computed.
Rule 13
Threshold for the purposes of significant economic presence.
(1) For the purposes of section 9(8)(d)(i) the aggregate amount of payments from transactions carried out by a non-resident with any person in India, in respect of any goods, service or property including provision of download of data or software in India during the tax year, shall be two crore rupees.
(2) For the purposes of section 9(8)(d)(ii), the number of users with whom systematic and continuous business activities are solicited or who are engaged in interaction shall be three lakhs.
Rule 14
Method for determining amount of expenditure in relation to income not includible in total income.
(1) The expenditure in relation to income which does not form part of the total income shall be the aggregate of following amounts, namely:—
a) the amount of expenditure directly relating to income which does not form part of total income; and
b) an amount equal to one per cent of the annual average of the monthly averages of the opening and closing balances of the value of investment, income from which does not or shall not form part of total income.
(2) The amount referred to in sub-rule (1)(a) and (b) shall not exceed the total expenditure claimed by the assessee.
Rule 15
Valuation of perquisites.
(1) For the purpose of computing the income chargeable under the head "Salaries", the value of perquisites provided by the employer, either directly or indirectly, to the assessee (hereinafter referred to as employee) or to any member of his household by reason of his employment shall be determined in accordance with the provisions of this rule.
(2) (a) The value of residential accommodation provided by the employer, for the purpose of section 17(1)(a) and (b) of the Act, during the tax year, in the circumstances referred in column (B) of the Table I below, shall be determined in accordance with the column (C) or column (D) thereof, as the case may be:
Sl. No. Circumstances
TABLE I
Where accommodation is unfurnished
Where accommodation is furnished
A B C D
(1) Where the accommodation is provided by the Central Government or any State Government to the employees either holding office or post in connection
License fee determined by the Central Government or any State Government in respect of accommodation in accordance with the rules framed by such Government as reduced by the Value of Perquisite is determined as per the provisions of sub rule (2)(e)
with the affairs of the Union or of such State. rent actually paid by the employee.
(2) Where the accommodation is provided by any other employer and—
(a) where the accommodation is owned by the employer, or
(i) 10% of salary in cities having population exceeding 40 lakhs as per 2011 census in respect of the period during which the said accommodation was occupied by the employee during the tax year as reduced by the rent, if any, actually paid by the employee.;
(ii) 7.5% of salary in cities having population exceeding 15 lakhs but not exceeding 40 lakhs as per 2011 census in respect of the period during which the said accommodation was occupied by the employee during the tax year as reduced by the rent, if any, actually paid by the employee.;
(iii) 5% of salary in other areas, in respect of the period during which the said accommodation was occupied by the employee during the tax year as reduced by the
Value of Perquisite is determined as per the provisions of sub rule (2)(e)
(b) where the accommodation is taken on lease or rent by the employer.
rent, if any, actually paid by the employee.
Actual amount of lease rental paid or payable by the employer or 10% of salary, in respect of the period during which the said accommodation was occupied by the employee during the tax year, whichever is lower, as reduced by the rent, if any, actually paid by the employee.
Value of Perquisite is determined as per the provisions of sub rule (2)(e)
(3) Where the accommodation is provided by the employer specified in serial number (1) or (2) in a hotel (except where the employee is provided such accommodation for a period not exceeding in aggregate fifteen days on his transfer from one place to another).
Not applicable.
Actual charges paid or payable to such hotel or 24% of salary paid or payable for the tax year for the period during which such accommodation is provided, whichever is lower, as reduced by the rent, if any, actually paid or payable by the employee:
(b) The provisions of this sub-rule shall not apply to any accommodation temporarily provided to an employee working at a mining site or an on-shore oil exploration site or a project execution site, or a dam site or a power generation site or an off-shore site—
(i) which, having plinth area not exceeding 1000 square feet, is located not less than eight kilometres away from the local limits of any municipality or a cantonment board; or
(ii) which is located in a remote area:
(c) Where on account of his transfer from one place to another, the employee is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with reference to only one such accommodation which has the lower value with reference to Table I for a period not exceeding ninety days and thereafter the value of perquisite shall be charged for both such accommodations in accordance with Table I:
(d) Where the accommodation is owned or taken on lease or rent by the employer and the same accommodation is continued to be provided to the same employee for more than one tax year, the amount calculated in accordance with Table I:Sl. No. 2(a) or 2(b) shall not exceed the amount so calculated for the first tax year, as multiplied by the amount which is a ratio of the Cost Inflation Index for the tax year for which the amount is calculated and the Cost Inflation Index for the tax year in which the accommodation was initially provided to the employee.
