The Income-tax Act, 2025, a landmark reform in India’s direct tax framework, represents a comprehensive effort to simplify and modernise the country’s income-tax law, replacing the six-decade-old Income-tax Act, 1961. It marks a shift towards greater clarity and ease of compliance through simple language, a streamlined structure and a reader-friendly presentation, without altering the underlying tax policy.

The Bill was passed by the Parliament on 12th August, 2025, and received the assent of the Hon’ble President of India on 21st August, 2025, thereby becoming the Income-tax Act, 2025. 

The Income-tax Rules, 2026 were notified by the Central Board of Direct Taxes on 20th March, 2026 to operationalise the provisions of the new Act. 

The corresponding new Forms have also been notified. The Forms have been simplified, standardized and process re-engineered to make compliance simpler.

With its coming into force from 1st April, 2026, the Income-tax Act, 2025 marks a new chapter in India’s tax administration and an important step towards Viksit Bharat

Income-tax simplification and modernisation as the new Act replaces the old regime with streamlined compliance measures. The Income-tax Act, 2025 comes into force from 1 April 2026 and replaces the long-standing Income-tax Act, 1961. The reform is presented as a comprehensive simplification and modernisation of India's direct tax framework, aimed at improving clarity, ease of compliance, and reader-friendly presentation without altering the underlying tax policy. The Income-tax Rules, 2026 have been notified to operationalise the new Act, and the corresponding forms have also been issued to make compliance simpler.