Synopsis: Major changes in the Tax system will be introduced on the 1st of April, 2026. A new framework is being introduced to simplify the process and make it transparent. One of the major changes for taxpayers is the restructuring and renaming of important Income Tax forms. This article will discuss the 5 major changes in the tax forms.
The Income Tax Act, 2025 replacing the Income Tax Act, 1961, the Central Board of Direct Taxes (CBDT) has officially notified the revamped set of income tax forms under the new Income Tax Rules, 2026 effective from 1st April 2026.
1. TDS Exemption Declaration from Form 15G & 15H to Form 121
Under the current system, taxpayers who wanted to avoid paying TDS on interest income had to submit either form 15G or 15H depending on the taxpayers age. Now, both type of taxpayers i.e. tax payers below the age of 60 as well as taxpayers of the age of 60 and above, will use Form No. 121 for submitting declaration in order to avoid relevant income from being subjected to TDS. The following types of income are covered for the purpose of Form No. 121: PF withdrawals and Pension, Insurance Commission, Rent, Interest on deposits, Income from Mutual Funds, Payments in respect of Life Insurance Policy, Dividend etc.
2. Salary TDS Certificate: From Form 16 to Form 130
For a long time, Form 16 has been one of the most important documents for salaried employees. It is issued by the employer and shows the detailed breakdown of salary, deductions, and the TDS paid to the government. This is one of the important documents not only for the filing of ITR but also for the application of loans. However, the name of this document is to be changed to Form 130 with effect from April 1st. Even though the purpose of this document remains the same, the renaming is part of the initiative to standardize the names of the documents for the new tax system.
3. Non-Salary TDS Certificate: From Form 16A to Form 131
While the income earned on salary is reported in form 16, the income earned on non-salary is reported in form 16A. It includes: Bank interest, Rental income, Commission, Professional fees. This is important for individuals with multiple sources of income. From April 2026, this form is being replaced by form 131. Similar to the change from Form 16 to 130, this is part of the government’s effort to simplify tax forms.
4. Tax Credit Statement: From Form 26AS to Form 168
Form 26AS has a lot of information related to the taxpayer, such as:
- TDS and TCS
- Advance tax payments
- Refund
- Outstanding tax demand
However, in recent times, there has been a shift towards more detailed reporting systems like AIS. The shift from Form 26AS to Form 168 is a step in this direction. Taxpayers will have access to a more complete picture of their tax position. At the same time, it also shows that the government will have greater visibility into financial transactions, making it harder to underreport income.
Also read: 9 Indian States With Surprising Tax Policies – Is Yours One of Them?
5. Removal of TAN Requirement for NRI Property Transactions
One of the most practical and significant changes related to property transactions involving NRI property. Under the existing system, If a resident purchases property from an NRI, he is required to:
- Obtain a TAN (Tax Deduction Account Number)
- Deduct TDS
- File a return for TDS by using the TAN
However, this process is complex and time-consuming. From April 2026, the process is being simplified. The buyer will not have to obtain a TAN instead a PAN card will be sufficient for the purpose of deducting TDS. This is a step toward reducing barriers. It aligns with the government’s broader goal of making PAN the central identifier for all tax-related activities.
Takeaway
From the changes there is a clear pattern that emerges, the government is reducing multiple forms into fewer simpler, unified and standardised forms. These changes are aimed at making tax compliance simpler, less confusing through consistent naming and structure, and faster, with better digital integration. For taxpayers, this means fewer forms to manage. However, it also means that the system is becoming more data-driven, leaving less room for discrepancies.
Written by Shrikara K
