The Income-tax (19th Amendment) Rules, 2025, introduced by the Ministry of Finance, bring significant changes to India’s tax landscape. These amendments aim to enhance compliance, simplify processes, and align with global standards. Here’s an overview of the key provisions:
- Mandatory Aadhaar Intimation for PAN Holders
Individuals who were allotted a Permanent Account Number (PAN) based on their Aadhaar Enrolment ID before October 1, 2024, are now required to intimate their Aadhaar number to the Income-tax Department. This step is part of the government’s initiative to strengthen the linkage between PAN and Aadhaar, ensuring better tracking and compliance.
- Introduction of Form 26QE and Form 16E
To streamline the reporting of tax deducted at source (TDS) under Section 194S, the government has introduced Form 26QE and Form 16E. Form 26QE is a challan-cum-statement that must be electronically furnished within 30 days from the end of the month in which the deduction is made. Form 16E serves as the TDS certificate to be issued to the deductee within 15 days from the due date of furnishing Form 26QE. These forms aim to simplify the reporting process and enhance transparency in cryptocurrency transactions.
- Amendments to Existing TDS Forms
The amendment also includes changes to existing TDS forms
Form 26QB: Applicable for TDS on the transfer of immovable property, now excludes the provisions of Section 206AB, which pertains to higher TDS rates for non-filers of returns.
Form 26QC: Pertains to TDS on rent payments by individuals, with similar exclusions as Form 26QB.
Form 26QD: Related to TDS on certain payments by individuals under Section 194M, also excludes the provisions of Section 206AB.
These amendments are designed to reduce the compliance burden on taxpayers and ensure that the TDS provisions are applied correctly.
- Enhanced TDS Thresholds
Effective from April 1, 2025, the government has increased the TDS threshold limits for various sections:
Section 194A: The TDS threshold on interest income has been raised from ₹50,000 to ₹1 lakh for senior citizens, and from ₹40,000 to ₹50,000 for others when the payer is a bank, cooperative society, or post office.
Section 194-I: The TDS threshold on rent payments has been increased from ₹2.40 lakh per annum to ₹6 lakh per annum.
Section 194J: The TDS threshold on fees for professional or technical services has been raised from ₹30,000 to ₹50,000.
These changes aim to reduce the number of TDS transactions, thereby easing the compliance process for taxpayers.
- Simplification of Self-Occupied Property Valuation
The tax authorities have streamlined the process of calculating the annual value for self-occupied properties. Taxpayers can now declare nil value for any two self-occupied properties, simplifying the valuation process and reducing the tax liability for homeowners with multiple properties.
- Decriminalization of Non-Filing of Returns
A significant change introduced in the Income Tax Bill, 2025, is the decriminalization of the non-filing of income tax returns. Previously, non-filing was considered a cognizable offence, leading to potential arrests. The new provision removes this provision, aiming to reduce the fear of arbitrary arrests and encourage voluntary compliance among taxpayers.
These amendments reflect the government’s commitment to simplifying the tax system, enhancing compliance, and aligning with global best practices. Taxpayers are advised to familiarize themselves with these changes and consult with tax professionals to ensure compliance.
