India enacts Income Tax Act 2025, merges tax-declaration forms
Change
India enacted the Income Tax Act, 2025, effective April 1, 2026, consolidating Forms 15G and 15H into a single Form 121, renaming Form 26AS as Form 168, and cutting Tax Collected at Source (TCS) to 2% on specified overseas remittances above ₹10 lakh.
Why it matters
The new Form 168 will combine tax credits with the Annual Information Statement into a single, PAN-linked Permanent Account Number (PAN) master record, forcing taxpayers to reconcile all PAN-associated transactions before filing to avoid automatic mismatches. The Foreign Assets of Small Taxpayers Disclosure Scheme (FAST-DS) creates a six-month, time-limited window for regularising undisclosed foreign assets, obliging eligible taxpayers to disclose holdings within that window or face standard penalties and criminal prosecution.
Implications
- • Resident individual taxpayers and Hindu Undivided Families (HUFs) must file a single Form 121 with one Unique Identification Number covering all accounts — otherwise they will have excess Tax Deducted at Source (TDS) withheld across accounts.
- • Resident taxpayers with undisclosed foreign assets must use the Foreign Assets of Small Taxpayers Disclosure Scheme (FAST-DS) within the six-month window to disclose holdings — failure to do so will expose them to standard penalties and potential criminal prosecution.
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