While the Income Tax Department’s new forms may seem like a routine renaming, experts warn the change could significantly alter how taxpayers report income, claim TDS credit, and interact with the system.
From Form 26AS being replaced by Form 168 to new PAN application forms and revamped tax deducted at source certificates, the changes will have an impact on salaried employees, pensioners, freelancers, businesses and NRIs alike.
Experts say the objective is to make tax reporting data-driven, standardised and easier to reconcile, while also tightening scrutiny around mismatches and underreporting.
Form 168 replaces Form 26AS
Form 168 will now function as the annual tax information statement under the new rules.
“Form 168 is expected to be more comprehensive than 26AS, covering not just TDS/TCS but a wider set of financial transactions and income data,” said Sudhir Kaushik, cofounder and chief executive officer at Taxspanner. He added that this could improve transparency but also increase scrutiny, making it important for taxpayers to reconcile transactions carefully before filing returns, referring to tax deducted and collected at source.
According to Ritika Nayyar, partner at Singhania & Co., Form 168 will consolidate a much wider range of financial information already available with the tax department, including securities transactions, investments and high-value dealings.
“This could make return filing more seamless for compliant taxpayers because more information may become pre-filled,” she said. “At the same time, mismatches between reported income and financial activity may become easier for the department to identify.”
S R Patnaik, partner and head of taxation at Cyril Amarchand Mangaldas, said Form 168 will also include details such as advance tax, self-assessment tax, refunds, demands and specified financial transactions in a single document.
For taxpayers, this means greater emphasis on checking and verifying income disclosures before filing returns. For instance, if a freelancer reports lower professional income in the ITR but receives higher payments reflected in Form 168, the mismatch could trigger scrutiny or notices later.
PAN application forms split into four categories
The government has also replaced old PAN application Forms 49A and 49AA with four separate forms, Forms 93, 94, 95 and 96.
Experts say the move is aimed at making PAN allotment more category-specific and reducing documentation confusion.
“The new forms segment applicants more clearly, making the PAN application process more structured and efficient,” Kaushik said. He noted that Indian taxpayers would benefit from clearer documentation requirements, while NRIs and foreign entities may see better alignment with regulatory needs.
Nayyar said the earlier common-format system often created unnecessary complexity for different applicant categories. “Separate forms have now been introduced for Indian individuals, Indian entities, foreign individuals and foreign entities,” she said.
Patnaik added that the revised forms include category-specific fields and stronger name-matching protocols between Aadhaar and PAN records. This, he said, may reduce processing errors and improve turnaround time for PAN allotment.
New forms for lower or nil TDS deduction
The new framework also introduces Forms 121 and 128 for taxpayers seeking lower or nil TDS deduction.
Experts say these forms could particularly help senior citizens, professionals, startups and taxpayers with low actual tax liability but high TDS deductions.
“Taxpayers with lower actual tax liability — such as senior citizens, freelancers and those claiming higher deductions — will benefit the most,” Kaushik said. He added that the forms could improve cash flow by reducing excess TDS and dependence on refunds.
Patnaik explained that Form 121 replaces old Forms 15G and 15H with a single declaration mechanism for individuals with nil tax liability. This could especially help retirees dependent on fixed deposit interest income.
For example, a retired individual earning interest income below the taxable threshold can submit Form 121 to avoid unnecessary TDS deductions by banks and avoid waiting months for refunds after filing returns.
Meanwhile, Form 128 replaces Form 13 and is meant for lower or nil TDS/TCS certificates. Nayyar said this may particularly help businesses and professionals with predictable lower tax liability avoid cash-flow blockage caused by excess tax deduction.
Forms 130 and 131 replace traditional TDS certificates
The government has also revamped TDS certificates through Forms 130 and 131.
Form 130 replaces Form 16 for salaried employees and pensioners, while Form 131 replaces Form 16A for non-salary income such as professional fees and freelance payments.
“Taxpayers should use these forms to provide accurate income and deduction details to deductors,” Kaushik said. “Timely and consistent disclosures will help avoid mismatches or notices.”
Patnaik advised salaried employees and freelancers to regularly reconcile these forms with Form 168, payslips, bank statements and ITR disclosures before filing returns.
Freelancers and gig workers with multiple clients may particularly need to monitor TDS details closely, experts said, as incorrect PAN entries or delayed TDS updates by deductors can lead to refund delays and tax notices.
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