Early Interpretation — Not Yet Settled Law

The Income-tax Act, 2025 is set to replace the Income-tax Act, 1961 from 1 April 2026, with the Income-tax Rules, 2026 replacing the 1962 Rules. Under the new framework, Section 420 is expected to take the place of Section 230 of the 1961 Act, and two new exit-compliance forms — Form 156 and Form 157 — have been introduced.

This article is an early interpretation of what practitioners currently understand about the new framework. Exact form mechanics, applicability conditions, and procedural requirements remain subject to detailed CBDT notification. Nothing below should be treated as settled law until the corresponding CBDT notifications and portal utilities are released.

The New Framework — Outline

Under the emerging structure:

  • Form 156 appears to be prescribed under Section 420(3) — an online declaration
  • Form 157 appears to be prescribed under Section 420(4), read with Rule 228 of the Income-tax Rules, 2026 — a certificate-based requirement
  • These are expected to replace Forms 30A, 30B, 30C, and 31 of the 1961 regime

Until CBDT releases the detailed notification, applicability conditions and filing mechanics should be verified against the latest official guidance before each filing.

Transition Caveat

Returns and events linked to the period ending 31 March 2026 (AY 2026-27) continue under the Income-tax Act, 1961 and its old forms. The Section 420 / Form 156 / Form 157 framework is expected to apply to departures from 1 April 2026 onwards. Where a departure straddles the 1 April 2026 cut-over, practitioners should file under whichever regime is in force on the actual departure date.

How the Two Forms Appear to Differ

Based on the current framework, the forms appear to serve different compliance purposes:

  • Form 156 — appears intended for PAN-based online declarations, likely where the individual holds a PAN and is required to furnish an exit declaration
  • Form 157 — appears to apply where Assessing Officer certification is required, such as non-PAN cases or cases where no taxable income is claimed in India

Final applicability and the exact classification rules will depend on CBDT notifications. Do not treat the above as a rigid PAN-vs-no-PAN divide until that notification is issued.

The Critical Conceptual Distinction

Even with the interpretive uncertainty, the structural distinction is clear:

  • Form 156 = Information you submit (declaration)
  • Form 157 = Certificate you obtain (AO-certified)

Treating these as interchangeable is likely to remain the most common practitioner error once the framework goes live.

Who Is This Actually For?

The framework is almost certainly going to be conditional, not universal. Before concluding that either form applies, evaluate:

  1. PAN status — Do you hold one?
  2. Taxability — Do you have taxable income in India for the relevant tax year?
  3. Notification status — Has the CBDT notified your category as covered?

If you are a regular NRI travelling in and out of India for work or family visits, neither form may apply. Verify against the latest CBDT notification before filing.

Transition Questions Practitioners Are Already Asking

  • I was required to file Form 30C before 1 April 2026 but left before that date — am I still clear? Yes, the old form governs departures under the old regime.
  • My departure straddles the 1 April 2026 cut-over — which regime? File under whichever regime is in force on your actual departure date.
  • Can I file Form 156 from abroad if I forgot before leaving? Form 156 is expected to be filed before departure. If missed, the compliance route may require interaction with the Assessing Officer — detailed CBDT procedural guidance is awaited.

Enforcement Backbone — Historical Context

The 1961 regime attached non-travel consequences to missing Form 30A/30B/30C/31 — including boarding-denial powers and interest/penalty on any outstanding tax. The 2025 Act is expected to carry forward this enforcement backbone; practitioners should expect CBDT to sharpen procedural machinery through notifications over the coming months.

Practical Takeaways (as things stand today)

  • Form 156 → likely a PAN-based online declaration
  • Form 157 → likely an AO-certified form for non-PAN or nil-tax situations
  • Both appear conditional — check CBDT notifications for your specific category
  • Forms 30A/30B/30C/31 continue to apply for pre-1 April 2026 departures
  • Do not treat any of the above as final compliance until CBDT notifies

Bottom Line

The Section 420 / Form 156 / Form 157 framework is a significant structural shift in India's exit-tax compliance regime. But the mechanics are still evolving on paper. If you are unsure whether Form 156 or Form 157 applies to your upcoming departure, verify with updated CBDT guidance or professional advice before filing. This article will be updated as the notifications are released.