Mumbai, February 9: The Income Tax Department has unveiled a groundbreaking draft revision to income tax rules, proposing a complete overhaul of form numbering systems. This strategic move aims to streamline tax filing for individuals, professionals, and businesses alike, making compliance smoother ahead of the new Income Tax Act 2025 rollout on April 1.
New form templates accompany the draft, addressing decades of accumulated complexity in existing numbers. Tax experts applaud the change, noting that convoluted numbering has long caused confusion and redundant data entry during returns. The simplified system promises real-time data integration with digital platforms, enhancing audits and verification processes.
However, the transition demands swift updates from employers, advisors, registrars, and companies to their internal systems. Key consolidations include merging audit forms 3CA, 3CB, and 3CD into a single Form 26 for tax audit reports. Transfer pricing audits shift from 3CEB to Form 48, while MAT certificates move from 29B to Form 66.
Minimum Alternate Tax (MAT), at 15% of book profits for companies where normal tax falls short, gets a clearer reporting path. Tax residency certificates now use Form 42 instead of 10FA, and DTAA disclosures transition to Form 41 from 10F. TDS applications for lower deductions become Form 128, salary TDS certificates Form 130.
TDS returns see renumbering: 24Q to 138, 26Q to 140, 27Q to 144. TCS returns shift to Form 143 from 27EQ. Annual tax statements evolve from 26AS to Form 168, and Form 61A for financial transactions becomes 165. Foreign remittances reporting moves to Form 145 from 15CA, with CA certificates to Form 146 from 15CB.
Experts predict these reforms will demystify ITR filing, foster uniformity, and empower taxpayers with clearer computations and processes. As the April deadline approaches, stakeholders are urged to prepare for a more efficient tax ecosystem.