Income Tax Draft Rules 2026
CA Raj Chawla
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Income Tax Draft Rules 2026:
1. New Draft Income Tax Rules 2026:
Central Board of Direct Taxes (CBDT) has proposed several changes to the Income Tax Rules, 2026, aiming to simplify compliance and modernize tax administration. Here are the key updates:
2. PAN Reporting Thresholds:
Cash Transactions: PAN will be mandatory for cash deposits or withdrawals aggregating to ₹10 lakh or more in a financial year.
3. Vehicle Purchases: PAN will be required for motor vehicle purchases exceeding ₹5 lakh, including two-wheelers.
4. Property Transactions: PAN will be mandatory for transactions above ₹20 lakh (from the current ₹10 lakh) for purchase, sale, gift, or joint development agreements involving immovable property.
5. Hotel and Event Payments: PAN quoting will be mandatory for hotel and restaurant bills, payments to convention centers or banquet halls, and payments made to event management service providers if the amount exceeds ₹1 lakh.
6. Allowances and Perquisites:
Free Meals: The value of tax-free perquisites for free food and non-alcoholic beverages provided by employers has been fixed at ₹200 per meal.
7. Company Car Allowances: The monthly allowance for official motor cars will be ₹8,000 for vehicles with engine capacity below 1.6 liters and ₹10,000 for other vehicles, including driver costs.
8. House Rent Allowance (HRA):
Expanded Metro Cities: The list of Category 1 metropolitan cities for HRA purposes has been expanded to include Bengaluru, Pune, Ahmedabad, and Hyderabad, in addition to Delhi, Mumbai, Kolkata, and Chennai.
9. Crypto Reporting and Digital Payments:
Crypto Exchanges: Mandatory reporting obligations have been proposed for crypto-asset service providers, requiring them to share transaction information with the tax department.
10. Central Bank Digital Currency (CBDC):
CBDC has been included as an accepted mode of electronic payment.
11. Simplification of Forms and Rules:
The draft rules have reduced the number of rules to 333 from 511 and forms to 190 from 399, cutting paperwork by nearly half.
Pre-filled returns will ease filing for taxpayers .
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With best regards
CA (Dr) Raj Chawla
B.Com (Hons), FCA, FCS, FCMA, LLB
MIMA, DISA, MICA, Phd, ASA (Aust), CMP (USA)
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