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Published on 6 April 2025

Key Amendments to Income-tax Rules Explained

Notification No. 112/2024: Amendments to Income-tax Rules, 1962

On October 15, 2024, the Ministry of Finance's Central Board of Direct Taxes issued Notification No. 112/2024, amending the Income-tax Rules, 1962. These amendments, effective immediately, introduce meaningful changes to Rule 21AA and Rule 26B, and aim to streamline the tax deduction process and enhance taxpayer compliance.

Key Amendments Overview

  1. Rule 21AA Changes:

    • The marginal heading and references to “section 89(1)” have been simplified to “section 89.”
    • Relevant language referring to “sub-section (1) of section 89” has also been updated to read “section 89.”

  2. Introduction of Rule 26B:

    • The revised Rule 26B allows assessees to report income from non-salary sources and any tax deducted or collected at source using the newly introduced Form No. 12BAA.
    • Details included in Form No. 12BAA encompass:
      • Any income subject to tax under heads other than ‘Salaries’ received during the financial year.
      • Tax deducted or collected at source according to Part B or Part BB of Chapter XVII.
      • Losses under the head “Income from house property” during the same financial year.

  3. Updated Forms:

    • Form No. 16 and Form No. 24Q have been revised to incorporate adjustments related to tax deductions as stated in Form No. 12BAA.

Detailed Amendments

Income-tax (Eighth Amendment) Rules, 2024

The amendments made under this notification are specified as follows:

  1. Title and Commencement:

    • These amendments shall be referred to as the Income-tax (Eighth Amendment) Rules, 2024, effective from the date of publication in the Official Gazette.

  2. Specific Changes to the Income-tax Rules, 1962:

    • Rule 21AA:
      • Substitute references to “section 89(1)” with “section 89.”
    • Rule 26B Substitution:
      • New provisions for tax reporting have been introduced, detailing particulars of income and tax deducted or collected.

  3. Form Adjustments:

    • Modifications to Form No. 10E ensure uniformity of references to “section 89.”
    • Form No. 12BAA has been established, requesting specific income and tax details for sub-section (2B) of section 192.
    • Form No. 16 includes added lines for tax details received as per Form No. 12BAA.
    • Form No. 24Q is updated to reflect necessary columns for tax reporting.

Implementation and Compliance

These changes aim to enhance tax administration by:

  • Providing clearer reporting requirements for taxpayers and deductors.
  • Facilitating the accurate calculation of tax deductions at source.

In conclusion, the introduction of Notification No. 112/2024 is a significant step within the tax landscape, supporting both the government’s compliance strategy and assisting taxpayers in navigating their reporting obligations more effectively.

Additional Notes

The principal rules were initially published in the Gazette of India via notification S.O. 969 (E) on March 26, 1962, and most recently amended on October 15, 2024, under the notification G.S.R 638 (E).

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