🔍 Overview
The Government has enacted the Income-tax Act, 2025, which will replace the Income-tax Act, 1961 with effect from 1 April 2026.
In parallel, Draft Income-tax Rules & Forms, 2026 have been released for public comments to facilitate implementation of the new law.
⚖️ Legal Background
Existing legislation: Income-tax Act, 1961
New legislation: Income-tax Act, 2025
Effective date: 1 April 2026
Implementation framework: Draft Income-tax Rules & Forms, 2026 (under public consultation)
🧠 Key Structural Changes under the Income-tax Act, 2025
Reduction in the number of chapters and sections
Simplified drafting through tables and sub-sections
Elimination of excessive provisos and explanations
Consolidation of related provisions under unified chapters
Procedural and operational details largely shifted from the Act to the Rules
📊 Overall Comparison – Income-tax Act, 2025 vs Income-tax Act, 1961
Particulars | Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|---|
Year of enactment | 1961 | 2025 |
Effective from | 1 April 1962 | 1 April 2026 |
Total chapters | 47 | 23 |
Total sections | 298 | 536 |
Drafting approach | Provisos & explanations | Tables & consolidated provisions |
Readability | Complex & fragmented | Clear & structured |
Procedural framework | Embedded in Act | Largely delegated to Rules |
Click here for Income Tax Act 2025
🧾 Draft Income-tax Rules & Forms, 2026 – Key Highlights
Draft Rules and Forms released for public consultation
Significant rationalisation of Rules and Forms
Forms redesigned with:
Standardised data fields
Simplified disclosures
Technology-friendly structure
Rules aligned with the simplified architecture of the new Act
🗓️ Important Dates
Last date for public comments: 22 February 2026
Proposed effective date: 1 April 2026
You can provide feedback and comments on new Income Tax Rules and Forms here
📝 Closing Note
The Income-tax Act, 2025 marks a transition towards a more concise, readable, and structured direct tax framework, supported by simplified Rules and Forms.
This change is intended to improve clarity, reduce interpretational complexity, and enhance compliance efficiency.
TrustFactON
Financial | Tax | Accounting | Advisory Services
📌 This update is intended for general information purposes only and does not constitute professional advice.