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Starting April 1, India’s new tax system will replace Form 16 with Form 130, offering more detailed information on income, deductions, and tax liability.
April 1 Brings Major Tax Changes
New Delhi: A new income tax structure will be implemented in the country from April 1, replacing the old 1961 law. This change will directly impact salaried individuals, as several significant changes have been made to their tax-related processes. The government aims to make the tax system more transparent and simple.
Until now, salaried employees were issued Form-16 by their employers, which served as proof of tax deduction (TDS). However, under the new rules, Form-130 will replace it. This new document will also be a TDS certificate, but will provide more detailed information than before.
Form-130 has been designed to provide complete details of taxpayers' income, deductions, and tax liability in one place. This will reduce the problem of data discrepancies between Form-16 and ITR. This discrepancy often resulted in taxpayers receiving notices, but efforts have now been made to address it.
A major change has been made to tax regulations as well as digital payment systems. According to Reserve Bank of India (RBI) directives, two-factor authentication (2FA) will now be mandatory for every online transaction. This means that payments using OTP alone will no longer be possible.
After April 1, 2026, users will be required to verify their identity in at least two ways. This could include OTP plus PIN, biometric (fingerprint or face ID), or device verification plus password. This step has been taken to prevent online fraud.
In recent years, cases of phishing, SIM swapping, and OTP fraud have increased rapidly. The new rules aim to curb these cybercrimes and strengthen user security. This will make digital transactions more secure than ever before.
According to the RBI, 2FA will be implemented on international online transactions by October 2026. This step will ensure the security of Indian users globally.
The new tax system and digital regulations are a major step towards increasing transparency and security. However, users will need to update themselves to meet these changes to avoid any problems.
