Simplified Income Tax Act, 2025, to Replace Old Law from April 1

The new law simplifies the tax timeline by doing away with the distinction between the assessment year and the previous year, replacing it with a single 'tax year' framework.

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Moneycontrol•11-01-2026, 13:23

Simplified Income Tax Act, 2025, to Replace Old Law from April 1

•The Income Tax Act, 2025, will come into force on April 1, replacing the six-decade-old 1961 tax law.
•The new law is revenue-neutral, focusing on simplifying direct tax laws, reducing ambiguities, and cutting down litigation.
•It reduces text volume and sections by about 50% and introduces a single 'tax year' framework, eliminating the assessment year/previous year distinction.
•Taxpayers can now claim TDS refunds even with late ITR filings without penal charges.
•Changes from the 2026-27 Budget will be incorporated; rules for implementation are being framed and will be notified after the FY27 Budget.

Why It Matters: India's new Income Tax Act, 2025, simplifies tax laws, reduces litigation, and streamlines processes from April 1.

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