Big news for taxpayers! The government is now going to completely revamp the Income Tax Act. The Income Tax Department is currently preparing simple and user-friendly tax forms and along with this, preparations have also been expedited to notify the new rules by the end of December 2025.
Central Board of Direct Taxes (CBDT) Member (Legislative) R.N. Parbat said that these new rules will be applicable under the Income Tax Act, 2025, which will come into force from April 1, 2026.
What will be special in the change?
The Income Tax Act, 2025 will now replace the old Income Tax Act of 1961. President Draupadi Murmu approved this new Act on 21 August 2025. This bill was passed in Parliament on 12 August. Work is going on on new rules and forms. The Income Tax Department started working on new rules and forms from 13 February 2025 itself. A Rules & Forms Committee has been formed, which is working on reviewing and improving the old rules. A draft has been prepared by taking suggestions from the public, which has now been sent to the TPL Division of CBDT for review.
What is the timeline?
The CBDT will review the draft. The draft will go to the Finance Minister. Then there will be a statutory review by the Law Ministry. After this, the rules will be tabled in Parliament and notified. The entire process is to be completed by December 2025.
The forms will be completely new and easy
All the existing tax forms like ITR, TDS return form etc. are being redesigned. This will make paying tax even simpler and easier. The government’s aim is to promote the ease of doing business. According to CBDT member R.N. Parbat, we are not only simplifying the law, but are also working on simplifying the process of paying tax so that taxpayers have the least hassle.
What will be new for taxpayers?
The new rules will be in simple language. Unnecessary provisions will be eliminated. Apart from this, FAQs, SOPs and guidance notes will be issued. Also, maximum use of technology will be made.
