Income Tax Act 2025
The Income Tax Act, 2025, which replaces the more than 60-year-old Income Tax Act, 1961, has been formally notified by the government. It unifies and modifies the requirements of the income tax law.
The Income Tax Act, 2025, which replaces the more than 60-year-old Income Tax Act, 1961, has been formally notified by the government. It unifies and modifies the requirements of the income tax law.
The Ministry of Law and Justice announced in the gazette that the Act was ratified by the President on August 21.
The new simplified Act, which will take effect on April 1, 2026, just makes the language of the income tax rules easier to grasp and does not impose a new tax rate.
In addition to eliminating unnecessary clauses and outdated terminology, the revised Act cuts the number of chapters from 47 to 23 and the number of sections from 819 to 536 in the Income Tax Act of 1961. The new Income Tax Act cut the word count from 5.12 lakh to 2.6 lakh.
The president has approved the new Income Tax Act 2025. The new regulations were announced by the central government on August 21. It will take the place of the previous 1961 statute on April 1, 2026. To make tax regulations simpler, the government has proposed a new income tax bill. The tax rates will remain unchanged as a result.
The Income Tax Bill was introduced in the Lok Sabha by Finance Minister Nirmala Sitharaman on February 13, 2025. The Income Tax Act now contains 2.5 lakh words instead of roughly 5 lakh, a 50% reduction for the convenience of taxpayers.
The New Income Tax Bill’s Four Main Points…
Assessment Year has been changed to Tax ‘Year’ in the Income Tax Bill. There are now 622 instead of 823 legislative pages. There are still 23 chapters, though. Schedules have grown from 14 to 16, and sections have increased from 298 to 536.
As with cash, bullion, and jewelry, cryptocurrency holdings will be included in any concealed income. This has been done to regulate online transactions in an open and lawful way.
More than sixty thousand hours were spent creating the new bill.
This study was carried out by a committee consisting of roughly 150 Income Tax Department officers. The new bill required almost sixty thousand hours to complete. 20,976 online recommendations were received to simplify, clarify, and eliminate superfluous provisions from the Income Tax Bill.
