Income Tax Updates

CORRIGENDUM  |  CBDT  |  G.S.R. 286(E)  |  16 APRIL 2026

CBDT Corrects Income Tax Rules, 2026 — Structural Errors in Rules, Forms and Cross-References Addressed

The Central Board of Direct Taxes issued a corrigendum vide G.S.R. 286(E) dated 16 April 2026, correcting a set of errors in the original Income Tax Rules, 2026, notified on 20 March 2026 under Notification No. 22/2026 (G.S.R. 198(E)). The Income Tax Rules, 2026 were notified under Section 533 of the Income Tax Act, 2025 and came into force on 1 April 2026, replacing the Income Tax Rules, 1962 for Tax Year 2026-27 onwards. The corrigendum is primarily clarificatory and editorial in character, addressing typographical errors, incorrect legal cross-references, and structural inconsistencies across multiple rules and form annexures. Specific corrections include: Rule 165 — the reference previously reading "sub-section (2) of the said section" has been corrected to "section 263(2)"; Rule 229 — clause "(1)" has been omitted; and Rule 243 — incorrect references to "section 242" and "section 244" have been replaced with the correct "rule 242" and "rule 244" respectively.

These corrections do not alter income computations, tax rates, or thresholds. The corrigendum's significance lies in removing interpretive ambiguity in cross-referenced provisions — particularly important during the first year of the new Act's operation, when practitioners and taxpayers are working from the new rules for the first time. Tax professionals preparing returns under the Income Tax Act, 2025 for Tax Year 2026-27 should use the corrected version of the rules available on the CBDT portal. The original forms under Notification No. 22/2026 remain unchanged in substance. The Income Tax Rules, 1962 continue to govern all returns and payments pertaining to Assessment Year 2026-27 and earlier years.

Source: A2Z Taxcorp — CBDT Corrigendum G.S.R. 286(E) to Income Tax Rules, 2026 (16 Apr 2026)

PORTAL UPDATE  |  INCOME TAX DEPARTMENT  |  EFFECTIVE 1 APRIL 2026

New Integrated e-Pay Challan System Live — Single Interface for Both Tax Acts, New Challan Forms ITNS 281N and 282N

The Income Tax Department has launched a new Integrated Payment Module on the e-filing portal (incometax.gov.in), enabling taxpayers to make payments under both the Income Tax Act, 1961 and the Income Tax Act, 2025 through a single, unified interface. The module has been live since 1 April 2026. Two new challan forms have been introduced alongside the existing forms: ITNS 281N covers TDS and TCS payments under the Income Tax Act, 2025, replacing ITNS 281 for Tax Year 2026-27 onwards; and ITNS 282N covers payments for other direct taxes under the 2025 Act. The path to access the new payment interface is: e-File → e-Pay Tax → Select the relevant Act → New Payment → Select the applicable option.

A critical distinction practitioners must understand: challans under the Income Tax Act, 1961 are generated based on the Assessment Year, while challans under the Income Tax Act, 2025 are generated based on the Tax Year. For all payments related to FY 2025-26 (AY 2026-27) and earlier years, the Act 1961 challans remain applicable and must be used. Payments for Tax Year 2026-27 onwards (i.e., income earned from 1 April 2026 forward) must be processed under the Act 2025 challans. Selecting the wrong Act when generating a challan creates allocation errors that require subsequent correction. Detailed user manuals for both challan types have been published on the CBDT portal. TAN-based users have a separate path and should refer to the TAN login challan creation instructions published by the department.

Sources: Income Tax e-Filing Portal — Integrated Payment Module  |  A2Z Taxcorp — New Integrated e-Pay Challan System

MCA — Deadline Alert

DEADLINE  |  MCA  |  DUE 30 APRIL 2026 — 4 DAYS REMAINING

MSME Form-1 (Oct 2025–Mar 2026) and NDH-3 Due Thursday — File Without Delay

MSME Form-1 is a half-yearly return prescribed under Rule 5 of the MSME Development (Amendment) Rules, 2019. It must be filed by every company that has received goods or services from a Micro or Small Enterprise supplier and whose outstanding payment to that supplier has exceeded 45 days from the date of acceptance. The return for the half-year ending 31 March 2026 (covering October 2025 to March 2026) is due on 30 April 2026. All companies with such outstanding dues — irrespective of their own size — are obligated to file, and the requirement extends to subsidiaries of foreign companies operating in India. Failure to file or filing with incorrect data attracts penalties under the MSMED Act; there is no blanket exemption for companies that believe they have no dues, as each half-year requires a fresh determination.

NDH-3 is the half-yearly return to be filed by Nidhi Companies under Rule 21 of the Nidhi Rules, 2014. The return for October 2025 to March 2026 is also due on 30 April 2026. NDH-3 reports membership details, deposits, loans, and compliance status for the period, and must be filed on the MCA V3 portal by the Board-authorised director. Non-filing of NDH-3 attracts daily penalties and can trigger inquiry proceedings by the Registrar of Companies. Both forms must be filed on the MCA V3 portal. Companies should verify their credentials and DSC validity before attempting to file to avoid last-minute technical issues.

RBI & Financial Sector

DRAFT DIRECTIONS  |  RBI  |  DIGITAL PAYMENTS  |  22 APRIL 2026

RBI Issues Draft Master Direction on Prepaid Payment Instruments, 2026 — Overhauls Digital Wallet Framework, Comments Invited by 22 May

The Reserve Bank of India issued a Draft Master Direction on Prepaid Payment Instruments (PPIs), 2026 on 22 April 2026, proposing a comprehensive overhaul of the regulatory framework governing digital wallets and prepaid cards in India. The draft replaces the 2021 master directions and is open for public comments until 22 May 2026. Prepaid Payment Instruments — which include UPI-linked wallets, prepaid debit cards, gift cards, and transit cards — are currently held by hundreds of millions of users across platforms like Paytm, PhonePe, and MobiKwik, and the revised norms will affect issuers, aggregators, and end users alike.

The key proposals in the draft cover four broad areas. First, on interoperability: all Full-KYC PPI issuers must mandatorily facilitate interoperability through card networks or UPI. PPIs can now also be "discovered" on third-party UPI applications such as Google Pay or BHIM, integrating wallets into the broader digital payments stack rather than keeping them as closed-loop instruments. This is a significant structural change for the fintech sector. Second, on wallet limits: general purpose PPIs can carry an outstanding balance of up to ₹2 lakh with cash loading capped at ₹10,000 per month. Small PPIs (issued without full KYC) carry a lower cap of ₹10,000 outstanding and ₹10,000 monthly debit limit. Transit PPIs (metro cards, bus passes) are capped at ₹3,000. A new category of PPI for foreign nationals and NRIs visiting India is proposed, enabled via UPI One World with a monthly debit cap of ₹5 lakh.

Third, on entity requirements: non-bank PPI issuers must have a minimum net worth of ₹5 crore at the time of authorisation and must achieve ₹15 crore by the end of their third year. All collected funds must be held in a separate rupee-denominated escrow account with a scheduled commercial bank in India. Banks that are already permitted to issue debit cards may issue PPIs with prior intimation to the Department of Payment and Settlement Systems, without requiring fresh RBI authorisation. Fourth, on customer protection: refunds on failed, returned, rejected, or cancelled transactions must be applied to the PPI immediately, even where doing so temporarily exceeds prescribed balance limits. Issuers must disclose all charges, validity periods, and terms in simple language, preferably in English, Hindi, and the local language, at the time of issuance. Cross-border use of PPIs remains prohibited under the draft. The prohibition on paying interest on PPI balances is retained.

Sources: Business Standard — RBI Proposes Measures to Strengthen PPI Framework (22 Apr 2026)  |  Inc42 — RBI Floats Draft Rules to Govern Prepaid Payment Instruments

MONTHLY BULLETIN  |  RBI  |  RELEASED 23 APRIL 2026

RBI April 2026 Bulletin: West Asia Conflict Cited as Primary Risk to Inflation and Growth; CPI Data Revised to New Base Year

The Reserve Bank of India released its April 2026 Monthly Bulletin on 23 April 2026. The Bulletin's centrepiece is the article titled "State of the Economy," which provides an authoritative assessment of domestic and global macroeconomic conditions heading into the new financial year. The key finding is stark: the ongoing conflict in West Asia has materially intensified pressures on global supply chains through March 2026, with some easing observed in the first half of April. India is significantly exposed to this conflict — the region accounts for approximately one-sixth of the country's exports, nearly half of its crude oil imports, and close to two-fifths of all inward remittances. RBI Governor Sanjay Malhotra, in a speech at Princeton University on 18 April, noted that while India is increasing domestic oil and gas production and diversifying import sources, some rationing of gas for industrial purposes is already underway.

The Bulletin warns that if the conflict persists and supply chains are not restored, India faces higher energy costs, input cost pressures, trade flow disruptions, and financial market spillovers. Domestically, economic activity displayed resilience across most segments in the review period, though some slowdown is noted in specific sectors. CPI inflation edged up in March driven by fuel and food. Money market and bond yields moderated after a temporary ceasefire in West Asia was announced mid-April. On the data side, the Bulletin introduces a revision to Table 19 on the Consumer Price Index, now aligned with the new CPI base year of 2024=100 (replacing the earlier base of 2012=100). This revision also adds a dedicated measure of core inflation (CPI excluding food and fuel) to the official statistics series — a significant methodological update that changes how disinflation progress will be measured and communicated going forward.

Sources: GovPing — RBI Releases April 2026 Bulletin (23 Apr 2026)  |  Business Standard — RBI April Bulletin: West Asia Supply Chain Risk

KEY COMPLIANCE DEADLINES — APRIL TO AUGUST 2026

30 APR 2026 — THIS THURSDAY MSME Form-1 (Oct 2025–Mar 2026) · NDH-3 for Nidhi Companies (Oct 2025–Mar 2026) · File on MCA V3 portal	11 MAY 2026 GSTR-1 for April 2026 (monthly filers) · GSTR-1 IFF for QRMP taxpayers (Apr 2026 period)
15 MAY 2026 Last date for public comments on RBI Draft Master Direction on PPIs, 2026 — submit to RBI's Department of Payment and Settlement Systems	20 MAY 2026 GSTR-3B for April 2026 (monthly filers with AATO above ₹5 crore) · GSTR-5 and GSTR-5A for April 2026
22 MAY 2026 Last date for public comments on RBI Draft PPI Master Direction 2026 (same as 15 May above, as per press reports citing 22 May) · GSTR-3B for Apr 2026 — Category 1 states (AATO up to ₹5 crore)	30 MAY 2026 LLP Form 11 — Annual Return of Limited Liability Partnerships for FY 2025-26
31 MAY 2026 TDS Return (Q4, FY 2025-26) — Forms 24Q, 26Q, 27Q, 27EQ · Form 15CC for authorised dealers (remittances under FEMA)	15 JUL 2026 CCFS-2026 amnesty window closes — last day to file pending ROC returns at 10% of additional fee. No extension expected.
31 JUL 2026 ITR-1 and ITR-2 for AY 2026-27 — salaried individuals and HUFs (non-audit). DIR-3 KYC for all active DINs.	31 AUG 2026 ITR-3 and ITR-4 for AY 2026-27 — non-audit business and professional filers. Extended deadline under Income Tax Act, 2025 transition.

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This bulletin is for general information only and does not constitute legal, tax, or financial advice.
Please verify with primary sources and consult your CA or advisor before acting.