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Income Tax Law
Beginning April 1, the Income Tax Act, 2025, will come into force replacing the six-decade old tax law and the changes made in tax laws in 2026-27 Budget will be incorporated in the new legislation. The 2025 I-T law is revenue neutral with no change in tax rates. It has only made direct tax laws simple to understand, removed ambiguities thus reducing scope for litigations. It reduces text volume and sections by about 50 per cent vis-a-vis the 1961 income tax act. The new law simplifies the tax timeline by doing away with the distinction between the assessment year and the previous year, replacing it with a single 'tax year' framework. It also allows taxpayers to claim TDS refund even when ITRs are filed after deadlines, without any penal charges. Any changes with regard to taxation of individuals, corporates, HUFs and others, which are announced in the Budget for 2026-27 on February 1 will be incorporated in the new I-T Act, 2025. The rules to implement the new Income Tax law are .
President Droupadi Murmu has given her assent to the Income-tax Act, 2025, which will replace the archaic Income Tax Act, 1961. The Income Tax Act, 2025, will come into effect from the next financial year, beginning April 1, 2026. The new Act will make tax laws simple and reduce wordage in the legislation, making it easy to understand. "The Income-tax Act, 2025, has received the Hon'ble President's assent on August 21, 2025. A landmark reform replacing the 1961 Act, it ushers in a simpler, transparent & compliance-friendly direct tax regime," the Income Tax department said in a post on X. The Income Tax Bill, 2025, was passed by Parliament on August 12. The new Act does not impose any new tax rate and only simplifies the language, which was required for understanding the complex Income Tax laws. The new law removes redundant provisions and archaic language and reduces the number of Sections from 819 in the Income Tax Act of 1961 to 536 and the number of chapters from 47 to 23. Th
The Supreme Court has held that an assessee must comply with a summons and furnish a response to a show cause notice when it is issued by the central or the state tax authority. "Assessee" under the Income Tax Act of 1961 refers to any individual or entity that holds the legal liability of tax payment or any other financial commitments as specified by the Act. Thus, laying down guidelines to prevent duplication of adjudication by central and state GST authorities, a bench of Justices J B Pardiwala and R Mahadevan said that mere issuance of a summons does not enable either the issuing authority or the recipient to ascertain that proceedings have been initiated. "Where a summons or a show cause notice is issued by either the Central or the State tax authority to an assessee, the assessee is, in the first instance, obliged to comply by appearing and furnishing the requisite response, as the case may be. "Where an assessee becomes aware that the matter being inquired into or investigat
Parliamentary Affairs Minister Kiren Rijiju on Saturday said that Finance Minister Nirmala Sitharaman will introduce the new Income Tax Bill, as cleared by a Select Committee, in the Lok Sabha on Monday. Rijiju's statement came in the wake of apprehensions voiced in a section of the media on the withdrawal of the Income Tax Bill from the Lok Sabha on Friday. "It is being presumed that there will be an absolutely new bill, ignoring the earlier bill for which a lot of work was done, and all the work done and time spent will go down," Rijiju said. The minister made it clear that the apprehensions were ill founded as the new bill to be introduced will incorporate all the changes which have been suggested by the Select Committee and which have been accepted by the government. Rijiju said it was a normal parliamentary procedure when the amendments to a bill already introduced in the Lok Sabha are too many. The Select Committee of the Lok Sabha, chaired by BJP member Baijayant Panda, mad