Filing income tax in India could soon become much simpler.
The Income Tax Department of India has proposed new draft rules that may remove an extra step taxpayers currently face while choosing between the old tax regime and the new tax regime.
If these rules are approved, many taxpayers will no longer need to submit a separate declaration form just to choose their preferred tax system.
Here’s a simple look at what may change.
What Is the Current Rule?
At present, some taxpayers — especially those who have business or professional income — must file an additional form called Form 10-IEA.
This form is required when they want to opt for the old tax regime instead of the new concessional regime.
The form must be submitted online before the income tax return deadline under the Income-tax Rules, 1962.
However, the rule is different for salaried individuals who do not have business income. They do not need to file this extra form.
They can simply choose their preferred tax regime while filing their Income Tax Return (ITR).
Because of this difference, some taxpayers — particularly business owners — face extra paperwork and confusion.
What Will Change Under Draft Income Tax Rules 2026?
Under the proposed Draft Income Tax Rules, 2026, the process could become much easier.
Taxpayers will be able to choose between the old and new tax regimes directly within their ITR form.
In other words, no separate form will be required.
The option to select or withdraw a tax regime will be done while filing the return under the Income Tax Act, 2025.
This means everything will happen in one place — the income tax return form itself.
The change is expected to reduce the number of steps involved and make compliance easier.
Who Will Be Covered by the New Rule?
The proposed rule will apply to several types of taxpayers, including:
Individuals and Hindu Undivided Families (HUFs)
Domestic companies
New manufacturing companies
Resident co-operative societies
Certain associations and artificial juridical persons
Each year, taxpayers will simply choose their preferred tax regime while filing that year’s income tax return.
Why This Change Is Important
The biggest advantage of the proposed rule is simplicity.
Currently, taxpayers with business income have more compliance requirements than salaried employees.
The new rule aims to remove this gap.
If implemented, the changes will:
Reduce paperwork
Remove duplicate steps
Create a uniform process for different taxpayers
Make tax regime selection clearer and easier
If the draft rules are officially approved, they will come into effect along with the Income Tax Act, 2025.
For millions of taxpayers, this could mean a smoother, faster, and more user-friendly income tax filing process in the coming years.
