<h1>Income Tax Act, 2025 replacing 1961 law: tax-year system, shorter code, late filers can claim TDS refunds</h1> The Income Tax Act, 2025 will come into force from April 1, replacing the Income Tax Act, 1961, and will incorporate any direct tax amendments announced in the 2026-27 Budget. It is stated to be revenue neutral, with no change in tax rates, while reducing statutory text and provisions by about 50% and removing obsolete or irrelevant provisions, with the stated consequence of simplifying compliance and reducing interpretational ambiguity and litigation. The Act replaces the dual concepts of 'previous year' and 'assessment year' with a single 'tax year' framework, thereby simplifying statutory timelines. It also permits taxpayers to claim refund of tax deducted at source even where income-tax returns are filed after the due date, without penal charges.