Form 156 rule triggers compliance concerns as e-filing utility remains unavailable; here's what it means

A newly introduced compliance requirement under the Income-tax Rules, 2026, has hit a roadblock at launch, with taxpayers and professionals highlighting the absence of the required filing utility even as the rule has come into force from April 1, 2026.

As per amendments under Rules 228–229 and notification G.S.R. 198(E) dated March 20, 2026, individuals holding a Permanent Account Number (PAN) are now required to file Form 156 electronically on the Income Tax Department’s e-filing portal before travelling abroad. The form is intended to capture key details such as the purpose of travel and the estimated duration of stay overseas, marking a shift toward event-based tax reporting.

However, the implementation has exposed a critical gap. The Form 156 utility is currently not available or activated on the official portal, leaving taxpayers with no mechanism to comply.

MUST READ: Not just Rs 12 Lakh: How Rs 14.65 lakh salary can be tax-free from this year

CA Anupam Sharma, who has formally raised the issue with the Central Board of Direct Taxes (CBDT), noted that both travellers and tax professionals are unable to locate any filing link or offline utility. “This creates a situation where compliance is mandated by law, but practically impossible to execute,” he said.

The issue is particularly concerning given the ongoing travel season. Students heading abroad, business travellers, and tourists may face uncertainty at airports due to non-compliance with a requirement that lacks operational support. There is growing apprehension that Customs or Immigration authorities could question travellers despite the systemic unavailability of the form.

Sharma, in his representation to the CBDT, has urged immediate intervention to prevent unnecessary disruption. He has recommended that the Board expedite the rollout of the Form 156 e-filing utility, ensuring that taxpayers can comply seamlessly with the new rule.

Additionally, he has called for a formal clarification or circular granting a grace period or interim waiver until the digital infrastructure is fully functional. Without such relief, experts warn that the rule could lead to avoidable compliance stress and confusion.

MUST READ: ₹200 per meal rule explained: How you can maximise tax savings under new, old tax regimes

Another key recommendation is coordination with the Ministry of Home Affairs (Immigration authorities) to ensure that travellers are not harassed or delayed at departure points during this transition phase.

Tax experts point out that while the objective of tracking outbound travel data is aligned with improving tax transparency and monitoring, the success of such measures depends heavily on execution readiness. A mismatch between regulatory enforcement and system availability risks undermining taxpayer trust.

As of now, the CBDT has not issued an official clarification addressing the issue. With outbound travel volumes rising and the rule already in effect, stakeholders are closely watching for swift action to bridge the gap between policy and implementation.