The story so far: With effect from April 1, 2026, the Income Tax Act, 2025 replaces the six-decades-old Income Tax Act, 1961. The objective is to enhance predictability, transparency, reduce compliance burden, and offer taxpayers a streamlined and simplified tax filing process. Compared to the old Act, which had 819 Sections and 14 Schedules, the 2025 Act is leaner, with 536 Sections and 16 Schedules. Further, the number of Rules have also been reduced from 511 to 333, while forms have been significantly reduced from 390 to 190. Particularly, this rationalisation is evident in provisions that directly impact individual taxpayers, such as submitting Forms 15G/15H to prevent excess Tax Deducted at Source (TDS), paying Tax Collected at Source (TCS) on overseas remittances under the Liberalised Remittance Scheme (LRS), and using the new FAST-DS system for simpler and faster TDS compliance. A closer look at the key changes in these areas:

Forms 15G, 15H, 26AS: What has changed?

Until March 31, 2026, before the Income Tax Act 2025 comes into effect, taxpayers had to carefully assess their eligibility and often faced confusion over choosing the correct form: Form 15G or Form 15H? Form 15G was used by resident individuals below 60 years and other eligible persons (excluding companies and firms), while Form 15H was filed by resident individuals aged 60 years or above. For those unfamiliar, the two forms are nothing but declarations stating that the taxpayer’s estimated total income for the financial year is nil, ensuring that TDS is not deducted unnecessarily. Eliminating ambiguity, under the new Income Tax Act, 2025, both forms have been merged into a single unified Form 121. Under Section 393(6) of the new Act, Form 121 applies to all declarants regardless of age.

Now, for filing Form 121, eligible declarants are resident individuals (both below and above 60 years), Hindu Undivided Families (HUFs), and other specified entities meeting the stipulated criteria. However, companies, firms, and non-residents are not eligible to file this form. Form 121 covers income such as PF withdrawals and pensions, insurance commissions, rent, interest on deposits, income from mutual funds, dividends, and income from life insurance policies (including bonus).

Earlier, taxpayers had to submit separate Forms 15G and 15H to each bank, mutual fund, or demat account, and a separate Unique Identification Number (UIN) was alloted for each form or each declaration. Thus, taxpayers were forced to submit multiple forms, thereby facing a risk of paying excess TDS if any form was missed or not submitted on time. Under the new system, a single Form 121 can be submitted for all accounts, with one UIN tracking the declaration across them, ensuring no excess TDS is deducted unnecessarily, saving time, and making the process simpler and hassle-free.

Further, effective April 1, 2026, another familiar Form 26AS is being officially renumbered as Form 168 under the new Income Tax Act, 2025. While the old form mostly focussed on “tax credits” (tax already deducted by your bank or employer), the new Form 168 is much smarter. It acts like an all-in-one “financial diary,” which merges your tax details with the Annual Information Statement (AIS). That is, it now automatically tracks almost everything linked to your PAN, from your salary, house rent to stock market trades and even large credit card spends. Overall, it’s not just the receipt of taxes paid, but it’s your comprehensive financial profile. In short, it’s the government’s way of putting your entire financial year into a single “master folder,” tracking your income, expenditure and taxes paid in advance.

TCS under RBI’s Liberalised Remittance Scheme

Under the Reserve Bank of India (RBI’s) Liberalised Remittance Scheme (LRS), resident individuals are required to pay Tax Collected at Source (TCS) on outward remittances under Section 206C(1G). Effective April 1, 2026, for remittances made specifically for education and medical treatment over and above ₹10 lakh in a financial year, the TCS rate is reduced to 2%, down from the earlier 5%, thereby reducing upfront tax burden. Likewise, for overseas tour packages, TCS is reduced from 5% to 2% on amount exceeding ₹10 lakh in a financial year.

FAST Disclosure Scheme

The Foreign Assets of Small Taxpayers Disclosure Scheme (FAST-DS 2026) is a time-bound compliance window introduced under the new Income Tax Act, 2025. The objective of this scheme is to help taxpayers regularise undisclosed foreign assets or income.

Unlike the stricter “black money” laws, this scheme offers small taxpayers, such as students, young professionals, tech employees, relocated NRIs, and such others, a pragmatic “second chance” for voluntarily disclosing their holdings within a six-month window and paying a reduced tax rate, or a flat fee for technical lapses. Those who have inadvertently failed to report these assets in their past tax returns, may also make use of this window and save themselves from severe penalties and criminal prosecution typically associated with the Black Money Act.

By rationalising forms, streamlining processes, and offering targeted relief measures, the Income Tax Act, 2025 marks a shift towards a simpler, transparent, and technology-driven tax process focussed on easing compliance for individuals.

Published – March 31, 2026 11:58 pm IST