New Income Tax Act 2025: Simplification and Transition

The Central Board of Direct Taxes (CBDT) is preparing for the implementation of the new Income Tax Act, 2025, set to roll out on April 1, 2026. New forms, rules, and FAQs will be released to assist taxpayers in understanding the simplified and updated tax legislation.

The Central Board of Direct Taxes (CBDT) is gearing up for a significant transition as it prepares to implement the new Income Tax Act, 2025. The act is scheduled to come into effect on April 1, 2026, marking a move towards simplifying tax legislation for taxpayers.

CBDT Chairman Ravi Agrawal highlighted during a post-Budget interview with PTI that the proposals for direct taxes by Finance Minister Nirmala Sitharaman on February 1 are part of an ongoing effort to streamline the tax law, easing the process for taxpayers. The new forms, rules, and a comprehensive FAQ will soon be made public and open for stakeholder consultations.

The announcement, seen as a continuum of the simplification process initiated in July 2024, also includes measures such as decriminalizing certain prosecution provisions and enhancing tax administration. The government aims to minimize litigation and reduce compliance costs, ensuring better services for taxpayers as the new legislation comes into force.

(With inputs from agencies.)