New Income Tax Act 2025 to take effect from April 1; simplified rules, no change in tax rates
Taxpayers can also claim TDS refunds even if they file their returns late, without paying penalties
PTC Web Desk: Finance Minister Nirmala Sitharaman announced that the new Income Tax Act, 2025, will come into force from April 1, 2026, replacing the old Income Tax Act of 1961. The new law aims to simplify tax rules and make filing easier for taxpayers.
The Finance Minister said the new act would not change tax rates or slabs, but it would make the law simpler and easier to understand. Many confusing sections have been removed, and the number of provisions has been reduced by almost half. This will help reduce disputes and court cases related to income tax.
One of the key changes in the new law is that the old “previous year–assessment year” system will be replaced by a single tax year. Taxpayers can also claim TDS refunds even if they file their returns late, without paying penalties.
The government will soon notify the detailed rules and tax forms so that taxpayers have enough time to understand the changes. The forms will include guidance on Advance Tax, TDS, and filing returns under the new law.
The Income Tax Act, 2025 was passed by Parliament on August 12, 2025, and received the President’s approval on August 21, 2025. The new law is expected to make income tax compliance simpler, faster, and more taxpayer-friendly.