New I-T Act effective from April: What changes for you?
What's the story
The new Income Tax Act 2025 will come into effect in India from April 1, 2026. The act seeks to simplify the tax code and reduce interpretational disputes by cutting down on complexity. It reduces the number of sections from 819 to 536 and chapters from 47 to just 23. The new law also introduces a 'tax year' concept for income and taxation purposes.
Key changes
New act simplifies TDS provisions and defines VDAs
The new Income Tax Act brings all tax deducted at source (TDS) provisions under Section 393, eliminating the earlier practice of spreading TDS clauses across various sections. It also defines the Virtual Digital Assets (VDAs), including cryptocurrencies and tokenized assets. Overlapping and redundant clauses have been removed, making the law easier for taxpayers to read and interpret.
Tech integration
It promotes technology-based compliance
The Income Tax Act 2025, emphasizes technology-based compliance and a more structured framework for tax recovery under Chapter XIX-D. Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal has urged officials to prepare for the transition with clarity of intent and focused execution. He stressed that this year is special as they prepare for the shift to the new law.
Preparation
CBDT chairman emphasizes training and familiarization
Agrawal has said that the coming months will require their "active involvement in training and familiarization so that we understand the intent and structure of the new law." He added that technology will play a key role as systems adapt to the new framework. Familiarity with data platforms and automated processes will be essential, especially for the younger officers who will lead the tax department in years to come.