The Central Board of Direct Taxes (CBDT) has notified the Income-tax (Amendment) Rules, 2026, introducing changes to Rule 128 of the Income-tax Rules, 2026. The amendments were published in the Gazette of India on March 31, 2026, and have come into force from April 1, 2026.

The notification has been issued in exercise of powers under Sections 183 and 533 of the Income-tax Act, 2025. The amendments primarily relate to the treatment of income arising from investments made prior to April 1, 2017.

Under the revised Rule 128, income accruing or arising, or deemed to accrue or arise, from the transfer of investments made before April 1, 2017, has been specifically carved out. The amendment clarifies that such income, even if received subsequently, will be treated distinctly in the application of tax provisions.

Further, the substituted sub-rule (2) provides that provisions of Chapter XI of the Act shall apply to any arrangement irrespective of when it was entered into, insofar as tax benefits arise on or after April 1, 2017. However, an exception has been retained for income arising from transfer of investments made prior to that date.

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