Union Finance Minister Nirmala Sitharaman on Sunday said the Income Tax Act, 2025 will be implemented from April 1 and rules and tax returns forms will be notified shortly.
Beginning April 1, the Income Tax Act, 2025 will come into force, replacing the six-decade-old tax law and the changes made in tax laws in 2026-27 Budget will be incorporated in the new legislation.
In her Budget speech in the Lok Sabha on Sunday, Sitharaman said, “This (direct tax code) was completed in record time and the Income Tax Act 2025 will come into effect from April 1, 2026. The simplified income tax rules and forms will be notified shortly, giving adequate time to taxpayers to acquaint themselves with its requirements.”
The forms have been redesigned so that ordinary citizens can comply without difficulty, she said.
The 2025 I-T law is revenue neutral with no change in tax rates. It has only made direct tax laws simple to understand and removed ambiguities, thereby reducing scope for litigations. It reduces text volume and sections by about 50 per cent vis-a-vis the 1961 Income Tax Act.
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