New Delhi: Previously, the income tax law had more than 800 sections. In the new system, the number of sections and chapters has been reduced to less than half. This means that understanding taxes will now be even easier.
What is Income Tax Act, 2025?
If you are employed, run a business, or file tax returns, your tax-related world is about to change from April 1st. In Budget 2026, the government announced the implementation of a new income tax law. The aim is to simplify the tax system so that ordinary people do not face any difficulties in understanding it.
Finance Minister Nirmala Sitharaman stated in Union Budget 2026 that the new Income Tax Act 2025 will come into effect from April 1, 2026. With this, the nearly 60-year-old income tax law will be abolished. The government says that the new rules have been designed in such a way that ordinary people can easily understand them and pay taxes without fear.
The simplified Income Tax Rules and Forms will be notified in due course giving adequate time to taxpayers to acquaint themselves with its requirements.
What will change in Income Tax Act, 2025?
The biggest change is that difficult terms like Assessment Year and Previous Year will no longer be used. Instead, there will be only one simple term: Tax Year. The tax year will mean the entire year from April 1st to March 31st. If a new business starts or new income begins, the tax year will be considered from that day.
Simplified structure
The entire structure has been simplified in the new Income Tax Act. Where there were more than 800 sections before, their number has now been reduced. The number of chapters has also been reduced by more than half. Along with this, tables and simpler formulas have been added so that there is no difficulty in understanding the tax-related rules.
TDS refund can be claimed even if you file late ITR
Another relief is that even if you are unable to file your ITR on time for any reason, there is no need to worry. According to the new rules, you will still be able to claim your TDS refund even if you file your income tax return late, and you will not be subject to any heavy penalties. The rules related to TDS have also been simplified. Previously, TDS (Tax Deducted at Source) rules were scattered across different sections. Now, they have been consolidated into a single section, making it easier for both salaried individuals and businessmen.
Tax system to be completely digital
You will no longer need to visit government offices or appear before any official. The government has also clarified that the tax system will be made completely digital. Faceless assessments and online processes will be promoted so that people don’t have to visit offices and corruption is reduced.
