Definitions

Rule 2 — Definitions

Rule 2 of the 2026 Rules sets out the four foundational definitions used throughout the Rules: "Act" (the parent statute), "authorised bank" (banks authorised by the RBI to receive tax payments), "Form" (the prescribed forms in Appendix III), and "section" (a section of the Act). Sub-rule (2) imports definitions from the Act by reference, ensuring conceptual consistency between the parent statute and the subordinate Rules.

Drafting changes vs old Rule 2. The 1962 Rules had accumulated several letter-suffix definitions over six decades (Rule 2(dd), 2(de), 2(df) etc.). The 2026 Rules drop these as definitions in their own right — the substantive concepts they captured (e.g., "approved valuer", "unique transaction number", "electronic mode" etc.) have been absorbed into the relevant operative Rules. The result is a much shorter Rule 2.

Appendix change. The 1962 Rules' Forms were in Appendix II; the 2026 Rules house them in Appendix III. (Appendix I and Appendix II of the 2026 Rules contain other prescribed material — schedules of depreciation rates, lists of recognised stock exchanges, etc.) Practitioners must update Form-numbering references in templates.

Rule 2(2) — incorporation by reference. The default rule that Act-definitions apply to the Rules has long been the foundation of integrated reading of the Act and Rules. The 16,000-odd cross-references throughout the Rules — particularly the recurring "For the purposes of section ... of the Act" — depend on this incorporation. The Supreme Court in CIT v. Pure Pharma Ltd. (1974) 96 ITR 569 (SC) and Indian Chemical Industries Ltd. v. CIT (2008) 305 ITR 60 (SC) settled the integrated-reading approach; the same principle applies to the 2026 Rules.

Continuity of jurisprudence. K. P. Varghese v. ITO (1981) 131 ITR 597 (SC) — a Rule cannot impose tax not authorised by the Act; CIT v. Sandvik Asia Ltd. (2006) 280 ITR 643 (SC) — Rules are not to be construed in isolation from the Act; J. M. Shah v. JCIT (2017) 393 ITR 35 (Bom.) — definitional consistency between Act and Rules. All continue to apply.

Practical takeaway. (i) When researching any Rule, always cross-check whether the Act provides a specific definition that overrides any general definition. (ii) For "authorised bank" — RBI's list of authorised banks is published periodically; verify before placing tax-payment instructions. (iii) For "Form" — verify the Form is in Appendix III of the 2026 Rules; older Forms (Appendix II of 1962 Rules) survive in the interim under section 536 savings until rescinded but may need re-formatting for online filing.

Rules 1-2 — At a Glance

Mapping table for Rules 1 and 2:

Practitioner notes

• Cite "Income-tax Rules, 2026" for periods on or after 1-4-2026.
• Cite "Income-tax Rules, 1962" for periods up to 31-3-2026 — the savings clause keeps the old Rules alive for those periods.
• Forms re-numbered into Appendix III; track the CBDT's old-to-new Form mapping circular when issued.
• Definitions in the Act apply to the Rules (Rule 2(2)); always cross-check the Act before relying on a Rule definition in isolation.

— End of Rules Volume I —