India Introduces New Income-Tax Regime Ahead of April 1 Deadline

CBDT Notifies Income-tax Rules, 2026

On March 20, the Central Board of Direct Taxes (CBDT) notified the Income-tax Rules, 2026, introducing a new I-T regime effective April 1. The simplified framework aims to standardize procedures, improve compliance, and provide greater clarity across various tax matters.

Key Highlights

• The number of rules has been reduced from 511 to 333, and the number of forms has been streamlined from 399 to 190.
• The new rules will simplify take-home salary calculations for millions of Indian professionals.
• The rules will also provide greater clarity on employee perquisites and exemptions.

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Stricter Rules for Stock Exchanges

To qualify as recognized exchanges for derivatives trading, stock exchanges must meet strict criteria, including:

• Approval from the Securities and Exchange Board of India (Sebi)
• Maintaining detailed client records, including PAN
• Preserving audit trails for 7 tax years
• Ensuring transactions cannot be erased
• Submitting monthly reports on modified transactions to tax authorities

New Rules for Capital Assets

The notification provides guidance on determining the holding period of capital assets in specific cases, including:

• Converted securities
• Assets declared under earlier disclosure schemes
• Assets transferred during corporate restructuring

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Zero-Coupon Bonds

Infrastructure entities and public sector companies must meet the following criteria to issue zero-coupon bonds:

• Tenure: 10 to 20 years
• Investment-grade ratings from at least two agencies
• Listed on recognized Indian stock exchanges

NRI Status of Shipping Crews

The CBDT has clarified that time spent on eligible international voyages will be excluded from the total stay in India, helping Indian crew members maintain Non-Resident (NRI) status. Assessing officers are empowered to estimate income using reasonable methods such as turnover-based calculations or proportional profit attribution.

Salary Calculations

The new rules provide a framework for valuing perquisites, including housing, car loans, and other benefits, which will impact how salary is computed for tax purposes and affect the take-home pay of the salaried class.