Simplifying Tax Compliance: Income Tax Act 2025 Set to Transform Filing Process

The Income Tax Act, 2025, slated for implementation on April 1, aims to simplify tax compliance by overhauling return forms and rules. With input from the Directorate of Systems and tax policy division, the new act reduces sections and chapters for clearer understanding. No new taxes are introduced.

The Income Tax Department is set to unveil new ITR forms and rules by January under the revamped Income Tax Act, 2025, scheduled to take effect next fiscal year. The Central Board of Direct Taxes aims to simplify tax compliance, replacing the 1961 Act after six decades.

Central Board of Direct Taxes chief Ravi Agrawal emphasized the department's focus on making the tax return forms more accessible. By streamlining these forms, taxpayers are expected to find compliance easier, facilitating a smoother adaptation to the new law.

The forthcoming act significantly trims down its predecessor's extensive sections and chapters. With a reduction from 819 to 536 sections and from 47 to 23 chapters, the law enhances clarity by replacing dense language with tables and formulas, as explained by officials during the India International Trade Fair (IITF).

(With inputs from agencies.)