President Draupadi Murmu has given her approval to the Income Tax Act 2025, which replaces the old Income Tax Law. The new Income Tax Act will come into force from the beginning of the next financial year i.e. 1 April 2026.
President Draupadi Murmu has given her approval to the Income Tax Act 2025, which replaces the old Income Tax Law. The new Income Tax Act will come into force from the beginning of the next financial year i.e. 1 April 2026. The new Tax Act will simplify the laws and also reduce the number of words in the law, making it easier to understand.
What has the department written?
The Income Tax Department said in a post on the social media platform ‘X’, “The Income Tax Act, 2025 has received the assent of the Hon’ble President on 21st August, 2025. This is a historic reform replacing the 1961 Act which introduces a simple, transparent and compliance-friendly direct tax system.”
The Income Tax Bill 2025 was recently passed by both the Houses of Parliament. Let us tell you that there is no provision for any new income tax rate in the new law. It just simplifies the language of income tax laws, which was necessary to understand the complex income tax laws.
The size has become smaller
The new law removes redundant provisions and archaic language and reduces the number of sections from 819 to 536 and chapters from 47 to 23 in the Income Tax Act, 1961. The number of words in the new Income Tax Act has been reduced from 5.12 lakh to 2.6 lakh words. 39 new tables and 40 new formulas have been added to replace the dense text of the 1961 Act to enhance clarity.
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