Income Tax Act 2025: Reduced sections, simplified TDS, ITR forms, check features of new law

The Income Tax Department will bring in new rules and Income Tax Returns (ITR) forms under the new Income Tax Act, 2025, by January, said Central Board of Direct Taxes (CBDT) chief Ravi Agrawal said on Monday. Before its implementation from the next fiscal year starting April 1, the IT department will notify the new rules. “The intent of the department is to keep the I-T Return forms simple to ease compliance under the new law, which replaces the six-decade old Income Tax Act, 1961,” he said. After launching the Taxpayers' Lounge at the India International Trade Fair (IITF), briefing the reporters here, he said, “We are in the process of designing forms and rules. We are working towards putting this in place by January so that taxpayers have sufficient time to adapt their processes within their system.” He further said that the main aim is to keep the income tax return (ITR) forms simple for taxpayers to facilitate compliance. What are the features of the Income Tax Act, 2025? The Income Tax Act, 2025 was passed by Parliament on August 12 and will simplify tax laws but not new tax rates. All forms under the new Act, including TDS quarterly return forms and ITR forms, are being made anew, with the Directorate of Systems working towards making them taxpayer-friendly. After vetting by the law department, the rules will be notified and laid before Parliament, an official said. The Income Tax Act, 2025, which will come into effect from next financial year, April 1, 2026, will also reduce wordage in the legislation making it simple to understand. It has only simplified the language, which was required for understanding the complex income tax laws. The new tax law will also do away with redundant provisions and archaic language along with reducing the number of sections from 819 in the Income Tax Act of 1961 to 536 and the number of chapters from 47 to 23. The number of words has been reduced from 5.12 lakh to 2.6 lakh in the new law, and it has introduced 39 new tables and 40 new formulas, replacing the dense text of the 1961 law, to enhance clarity.