New Income Tax: Central Board of Direct Taxes (CBDT) chief Ravi Agarwal said the Income Tax Department will notify the ITR forms and rules under the simplified Income Tax Act, 2025, by January. This will provide significant relief to taxpayers.
New Income Tax: A completely new Income Tax Act will be implemented in the country from April 1, 2026. The Income Tax Act, 2025, will replace the old 1961 Income Tax Act. Parliament passed it on August 12. On Monday, Central Board of Direct Taxes (CBDT) Chief Ravi Agarwal stated that with the new law, ITR forms and all other forms are being completely simplified and streamlined. CBDT Chief Ravi Agarwal stated on Monday that the aim is to simplify tax compliance and make it more taxpayer-friendly.
Speaking to reporters after inaugurating the taxpayers’ lounge at the India International Trade Fair (IITF), Agarwal said, “We are in the process of preparing the forms and rules. We are working towards implementing them by January, so that taxpayers have enough time to improve their processes within their systems.”
New forms will be ready by January
The CBDT chief stated that all ITR forms, quarterly TDS returns, and other forms are currently being redesigned. The Directorate of Systems and the Tax Policy Division are working closely together. The goal is to have all forms and rules ready by January 2026, giving taxpayers enough time to adapt their software and processes.
The new law will come into effect on April 1, 2026.
The Income Tax Act 2025 will come into effect from the next financial year, 2026-27 (April 1, 2026). The new Act will simplify tax laws and reduce jargon, making them easier to understand. The new law does not introduce any new tax rates and merely simplifies the language, which is essential for understanding complex income tax laws. The new law removes unnecessary provisions and outdated language.
The number of sections in the Income Tax Act of 1961 has been reduced from 819 to 536, and the number of chapters from 47 to 23. The new law’s word count has been reduced from 512,000 to 260,000. Furthermore, 39 new tables and 40 new formulas have been added to replace the condensed text of the 1961 Act to enhance clarity.
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