Central Board of Direct Taxes (CBDT) chief Ravi Agarwal said on Monday that the Income Tax Department will notify the ITR forms and rules under the new Income Tax Act, 2025, by January.
This Act will come into effect from the next financial year beginning April 1, 2026. He said that the department aims to simplify income tax return forms to ease compliance under the new law. The new law will replace the nearly six-decade-old Income Tax Act, 1961.
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CBDT in the process of framing forms and rules
“We are in the process of preparing the forms and rules. We are working towards implementing them by January so that taxpayers have enough time to adapt their processes within our system,” Ravi Agarwal said while speaking to reporters after launching the taxpayers’ lounge at the India International Trade Fair (IITF).
The Income Tax Act, 2025 was passed by Parliament on August 12.
The Income Tax Act, 2025, was passed by Parliament on August 12. All forms applicable under the Income Tax Act, such as TDS quarterly return forms and ITR forms, are being reworked. The Directorate of Systems is working with the Tax Policy Division to simplify the forms for taxpayers. The official said that after scrutiny by the Law Department, the new rules will be notified and placed before Parliament. The Income Tax Act, 2025 will come into effect from the next financial year 2026-27 (April 1, 2026).
The new Act will make tax laws easier to understand.
The new Act will simplify tax laws and reduce wordiness, making them easier to understand. The new Act does not introduce any new tax rates and merely simplifies the language, which is essential for understanding complex income tax laws. The new Act removes redundant provisions and outdated language and reduces the number of sections from 819 to 536 and the number of chapters from 47 to 23 in the Income Tax Act, 1961. The new Act reduces the word count from 5.12 lakh to 2.6 lakh words and includes 39 new tables and 40 new formulas to replace the condensed text of the 1961 Act to enhance clarity.
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