The Draft Income-tax Rules, 2026, introduce Rule 160, which lays down the time, manner, verification process and compliance requirements for persons required to furnish a statement containing particulars of declarations received in Form No. 97.
This provision is directly linked to Rule 159 and strengthens the reporting framework by mandating the electronic submission of transaction-related declarations to the Income Tax Department.
Who is Required to Furnish the Statement under Rule 160?
As per sub-rule (2), the following persons are required to comply:
- Persons listed at Sl. No. 11, 12, 13, or 14 of Column (4) of the Table in Rule 159.
- Persons listed at Sl. No. 15 or 16, provided they are required to get their accounts audited under Section 58 of the Income-tax Act.
These entities, upon receiving a declaration in Form No. 97 relating to specified transactions under Rule 159, must file a prescribed statement with the Income-tax Department.
Mode of Furnishing the Statement
Rule 160(1)(i) mandates that the statement must be:
- Filed electronically through the online transmission of data
- Submitted to a designated server of the Directorate of Income-tax (Intelligence and Criminal Investigation)
- Accompanied by the generation of an acknowledgement number
This move aligns with the government’s push toward digital compliance, data transparency, and automated monitoring of high-value transactions.
Retention of Form No. 97
Entities receiving declarations must retain Form No. 97 for:
-
Six years from the end of the financial year in which the transaction was undertaken.
This long retention period ensures audit trail availability for investigation and assessment purposes.
Due Dates for Filing Statement of Form No. 97
Rule 160(3) prescribes specific timelines based on the date of receipt of declarations:
- If declarations are received by 30th September → Statement must be filed by 31st October of the same year.
- If declarations are received by 31st March → Statement must be filed by 30th April of the immediately following financial year.
These staggered timelines provide structured compliance windows for reporting entities.
Verification Requirements
The statement must be verified as follows:
- If the reporting person is an assessee under Section 2(11), verification must be done by a person specified under Section 265 of the Act.
- In other cases, verification must be carried out by the person referred to in Column (4) of Rule 159.
This ensures accountability and authentication of electronically submitted information.
Role of Systems Directorate
Rule 160(5) empowers the:
- Principal Director General of Income-tax (Systems) or
- Director General of Income-tax (Systems)
to prescribe procedures, data structures, and standards for secure capture and transmission of data.
This provision highlights the increasing role of technology and data governance in tax administration under the 2026 framework.
Why Rule 160 is Significant
Rule 160 enhances:
- Transparency in high-value transaction reporting
- Data integration for intelligence and investigation purposes
- Digital compliance and structured reporting timelines
- Strengthened documentation and verification controls
It reflects the Income-tax Department's continued shift toward real-time data collection, analytics-driven scrutiny, and system-based compliance monitoring.
Entities covered under Rule 159 must now closely review their reporting obligations under Rule 160 to avoid non-compliance risks and potential penal consequences.
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