The new law does not change the underlying tax policy. It is designed in simple language and a streamlined format to reduce confusion and make tax filings easier.
Nidhi | Apr 2, 2026 |
India Introduces Income Tax Act, 2025, to Simplify Tax Compliance
With the implementation of the Income Tax Act, 2025, from 1st April, 2026, India has taken a big step towards simplifying and modernizing its tax system by replacing the decades-old Income Tax Act, 1961. The step marks a new chapter in India’s tax administration and contributes towards Viksit Bharat.
The new act was passed by parliament on August 12, 2025, and received the president’s assent on August 21, 2025. It brings more clarity and simplicity and introduces a taxpayer-friendly approach.
The new law does not change the underlying tax policy. It is designed in simple language and a streamlined format to reduce confusion and make tax filings easier.
To align with the main objective of the new Income Tax Act, the Central Board of Direct Taxes (CBDT) notified the Income-Tax Rules, 2026, on March 20, 2026. It also notified of the relevant updated tax forms. The new forms are simple, standardised, and re-engineered to make compliance smoother.
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