New Income Tax Act: The new Income Tax Bill 2025 was passed in August 2025. The changes under this bill will come into effect in 2026. These changes will directly impact the common man. Meanwhile, the CBDT chief has asked officials to be prepared.
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New Income Tax Act: Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal sent a special message to Income Tax Department officers at the start of the new year. In it, he clearly stated that this year, 2026, is very significant for the department, as the new Income Tax Act will come into effect on April 1st. The old law, dating back to 1961 and more than six decades old, will be replaced by the Income Tax Act 2025. He urged officers to be prepared and proactive for changes in tax law.
In his letter dated January 1st, Agarwal wrote that new rules, procedures, and forms are currently being developed. Training and capacity building are also underway. He urged officers to focus their efforts on training and understanding the new law in the coming months, so they can better understand the intent and structure of the law and provide clear guidance to taxpayers. Taxpayers will be able to take advantage of the new Income Tax Bill in this year’s ITR filing. It will come into effect nationwide starting April 2026. This will directly impact the common man. If you file your Income Tax Return (ITR) every year, you should be aware of the changes under this bill.
Find out what changes will be made by the New Income Tax Bill 2025?
1. Due to the outdated Income Tax Act 1961, several needs were felt. Therefore, the Central Government introduced the New Income Tax Bill 2025.
2. Under this bill, the language will be simplified and clarified.
3. Options like Previous Year and Assessment Year will be eliminated and the concept of Tax Year will be introduced.
4. Under this rule, the CBDT has been given more power to promote digitalization.
5. It will be organized into 536 sections and 16 schedules, making it easier to understand and read.
6. Zero TDS certificates will be available.
7. Section 80M will be reintroduced to deal with dividend deductions.
8. Even if you file your ITR after the deadline, you won’t face any problems getting a refund. Any clauses that don’t support this will be removed.
What will new taxpayers benefit from?
The new law aims to simplify procedures and address previous shortcomings, potentially transforming the country’s income tax landscape. Once passed, India’s decades-old tax framework will be simplified. This will reduce legal complications and help taxpayers and MSMEs avoid unnecessary litigation.
