Outlook Business Desk
From April 1, 2026, India will bring the Income Tax Act 2025 into force, ending the six-decade-old tax law that has governed income taxation since 1961.
The new law aims to modernise India’s tax framework by simplifying complex provisions, updating procedures and aligning tax administration with current financial systems and practices.
While the new law revises procedures, it does not alter the basic tax framework, instead focusing on clearer wording, smoother compliance and making provisions easier for taxpayers to understand.
The Central Board of Direct Taxes (CBDT) is preparing new tax return forms and revised procedures, which taxpayers must follow for filing returns and completing related compliance processes.
Digital systems will become central under the new law, with, according to CNBC, increased use of automated assessments, electronic data handling and online communication for notices, filings and taxpayer interactions.
Beyond enforcement, the Income Tax Department is prioritising facilitation by encouraging voluntary compliance through structured guidance tools such as the NUDGE framework.
CBDT Chairman Ravi Agrawal has urged Income Tax Department officials to undergo training and familiarisation exercises to clearly understand the new law’s structure and guide taxpayers effectively.
Taxpayers are also advised to monitor official notifications, keep financial records organised and stay informed about procedural updates as digital verification becomes more prominent.
CBDT officials have begun training and capacity-building programmes to manage the transition, highlighting that taxpayers are expected to gain from clearer rules and stronger support under the new tax system.