24F-2NT

                                FORM 24F-2
                    Annual Notice of Securities Sold
                          Pursuant to Rule 24f-2



1.    Name and address of issuer:

      T. Rowe Price New Income Fund, Inc.
      100 East Pratt Street
      Baltimore, MD 21202


2.    Name of each series or class of funds for which this notice is
      filed:

      Not Applicable
      

3.    Investment Company Act File Number: 811-2396

      Securities Act File Number: 02-48848


4.    Last day of fiscal year for which this notice is filed: 

      May 31, 1996

5.    Check box if this notice is being filed more than 180 days after
      the close of the issuer's fiscal year for purposes of reporting
      securities sold after the close of the fiscal year but before
      termination of the issuer's 24f-2 declaration:                [  ]

6.    Date of termination of issuer's declaration under rule
      24f-2(a)(1), if applicable (see instruction A.6):

      Not applicable

7.    Number and amount of securities of the same class or series which
      had been registered under the Securities Act of 1933 other than
      pursuant to rule 24f-2 in a prior fiscal year, but which remained
      unsold at the beginning of the fiscal year:

      19,507,766 shares

8.    Number and amount of securities registered during the fiscal year
      other than pursuant to rule 24f-2:

      None

9.    Number and aggregate sale price of securities sold during the
      fiscal year:  

      43,672,826 shares aggregating $394,755,444


10.  Number and aggregate sale price of securities sold during the
     fiscal year in reliance upon registration pursuant to rule 24f-2:

 
     30,127,578 shares aggregating $274,517,850

11.  Number and aggregate sale price of securities issued during the
     fiscal year in connection with dividend reinvestment plans, if 
     applicable (see Instruction B.7):

     8,680,770 shares aggregating $78,212,976


12.  Calculation of registration fee:

     (i)  Aggregate sale price of securities
          sold during the fiscal year in reliance
          on rule 24f-2 (from Item 10):              $  274,517,850

    (ii)  Aggregate price of shares issued in 
          connection with dividend reinvestment 
          plans (from Item 11, if applicable):       +  78,212,976

   (iii)  Aggregate price of shares redeemed 
          or repurchased during the fiscal year 
          (if applicable):                           -  352,730,826

    (iv)  Aggregate price of shares redeemed or 
          repurchased and previously applied as 
          a reduction to filing fees pursuant 
          to rule 24e-2 (if applicable):             +        -0-

     (v)  Net aggregate price of securities sold 
          and issued during the fiscal year in 
          reliance on rule 24f-2 [line (i), plus 
          line (ii), less line (iii), plus line 
          (iv)] (if applicable):                     = $       -0-

    (vi)  Multiplier prescribed by Section 6(b) 
          of the Securities Act of 1933 or other 
          applicable law or regulation (see 
          Instruction C.6):                          x     1/2900

   (vii)  Fee due [line (i) or line (v) 
          multiplied by line (vi)]:                  = $       -0-



Instruction:  Issuers should complete lines (ii), (iii), (iv), and (v)
              only if the form is being filed within 60 days after the
              close of the issuer's fiscal year.  See instruction C.3.



13.    Check box if fees are being remitted to the Commission's 
       lockbox depository as described in section 3a of the
       Commissions's Rules of Informal and Other Procedures
       (17 CFR 202.3a).                                              [X]


       Date of mailing or wire transfer of filing fees to the 
       Commission's lockbox depository:

SIGNATURES

This report has been signed below by the following persons on behalf of
the issuer and in the capacities and on the dates indicated.


Carmen F. Deyesu, Treasurer
By (Signature and Title)*

July 24, 1996

EX-99.5

SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN, LLP
919 Third Avenue
New York, New York 10022-9998
(212) 758-9500
     
                                             July 24, 1996
                      
T. Rowe Price New Income Fund, Inc.
100 East Pratt Street
Baltimore, Maryland  21202
           
Dear Sirs:
           
          T. Rowe Price New Income Fund, Inc. (the "Corporation"), a
Maryland corporation, is filing with the Securities and Exchange Commission
(the "Commission") a Rule 24f-2 Notice (the "Rule 24f-2 Notice") containing
the information contained in paragraph (b)(1) of Rule 24f-2 under the
Investment Company Act of 1940, as amended (the "Rule").  The effect of the
Rule 24f-2 Notice, when accompanied by the filing fee, if any, payable as
prescribed by paragraph (c) of the Rule and by this opinion, will be to make
definite in number the number of shares sold by the Corporation during the
fiscal year ended May 31, 1996 in reliance upon the Rule (the "Rule 24f-2
Shares").

          We have, as counsel to the Corporation, participated in various
proceedings relating to the Corporation and to the Rule 24f-2 Shares. We have
examined copies, either certified or otherwise proven to our satisfaction to
be genuine, of its Charter and By-laws, as currently in effect, and a
certificate dated July 17, 1996 issued by the Department of Assessments and
Taxation of the State of Maryland, certifying the existence and good standing
of the Corporation. We have also reviewed the form of the Rule 24f-2 Notice
being filed by the Corporation.  We are generally familiar with the business
affairs of the Corporation.  
 
               The Corporation has advised us that the Rule 24f-2 Shares were
sold in the manner contemplated by the prospectus of the Corporation current
at the time of sale, and that the Rule 24f-2 Shares were sold in numbers
within the limits prescribed by the Corporation's Charter for a consideration
not less than the par value thereof as required by the laws of Maryland and
not less than the net asset value thereof as required by the Investment
Company Act of 1940, as amended.

          Based upon the foregoing, it is our opinion that:  

     1.   The Corporation has been duly organized and is legally existing
          under the laws of the State of Maryland.  

     2.   The Corporation is authorized to issue two hundred million
          (200,000,000) shares of Capital Stock, par value one dollar
          ($1.00) per share. Under Maryland law (i) the Board of Directors
          of the Corporation may increase or decrease the number of shares
          that the Corporation has authority to issue, and (ii) shares which
          were issued and which have subsequently been redeemed by the
          Corporation are, by virtue of such redemption, restored to the
          status of authorized and unissued Shares.
 
     3.   The Rule 24f-2 Shares were legally issued and are fully paid and
          non-assessable.  
 
               We hereby consent to the filing of this opinion with the
Commission together with the Rule 24f-2 Notice of the Corporation, and to the
filing of this opinion under the securities laws of any state.
 
               We are members of the Bar of the State of New York and do not
 hold
ourselves out as being conversant with the laws of any jurisdiction other than
those of the United States of America and the State of New York.  We note that
we are not licensed to practice law in the State of Maryland, and to the
extent that any opinion herein involves the law of Maryland, such opinion
should be understood to be based solely upon our review of the documents
referred to above, the published statutes of the State of Maryland and, where
applicable, published cases, rules or regulations of regulatory bodies of that
State.
 

                         Very truly yours,  
 
                         /s/ Shereff, Friedman, Hoffman & Hoffman, LLP

                         Shereff, Friedman, Hoffman & Goodman, LLP

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