By Eastern Samvaad 
India’s income tax system is set for a major transformation starting April 1, 2026, with the implementation of the new Income-tax Rules 2026. One of the most notable changes is the replacement of the widely used Form 16 with a newly introduced Form 130.
Form 130 will serve as an annual Tax Deducted at Source (TDS) certificate issued by employers to salaried individuals and pensioners. Unlike Form 16, the new format will provide a more detailed breakdown of salary, deductions, taxable income, and taxes paid. It will also include specific details such as employer and employee information, tax liabilities, and TDS or TCS records.
The form will be generated exclusively through the TRACES portal and will only be available after TDS returns are processed, ensuring better accuracy and transparency. Additionally, it will cover certain interest income details for senior citizens as per updated tax provisions.
Apart from this, ITR forms will be redesigned to align with the updated Income-tax Act, 2025, with clearer classifications of income and enhanced reporting requirements. The new system will also rely heavily on automation and pre-filled data, making filing easier for salaried taxpayers while increasing scrutiny for complex financial cases.