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India’s New Income Tax To Be Effective From April 1 To Simplify Provisions: All You Need To Know
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India is set to usher in a new era of direct taxation from April 1, when the Income Tax Act, 2025, comes into force, formally replacing the six-decade-old Income Tax Act, 1961.
New Income Tax Act, 2025.
India is set to usher in a new era of direct taxation from April 1, when the Income Tax Act, 2025, comes into force, formally replacing the six-decade-old Income Tax Act, 1961. The new legislation is aimed squarely at simplification, clarity and ease of compliance, without altering existing tax rates.
Crucially, the new law is revenue-neutral. There is no change in personal or corporate tax rates. Instead, the focus is on rewriting the law in simpler language, removing ambiguities and cutting down the scope for litigation. Compared with the 1961 Act, the new legislation reduces the overall volume of text and sections by nearly 50%, making it far more accessible for taxpayers.
Why was the 1961 Income Tax Act replaced?
The Income Tax Act, 1961, was enacted when India was a young republic with a vastly different economic structure. Over the last 64 years, the economy, technology, and ways of earning income have changed dramatically. While successive governments amended the law to keep pace, the result was a bulky and complex statute filled with cross-references, provisos and obsolete sections.
With hundreds of amendments layered over decades, the law became difficult even for professionals to navigate, let alone ordinary taxpayers. The overhaul was driven by the need to modernise the framework and make it understandable in today’s economic and technological context.
What does the new Income Tax Act aim to achieve?
The Income Tax Act, 2025, is designed to be leaner and reader-friendly. The government’s objective is to allow taxpayers to clearly understand how their tax liability is computed, reduce interpretational disputes, and lower the volume of tax litigation. By removing redundant provisions and simplifying structure and language, the new law seeks to bring certainty and transparency to direct taxation.
How is the new law leaner?
The 1961 Act covered multiple direct taxes, including personal income tax, corporate tax, securities transaction tax, wealth tax and gift tax. Over time, several levies — such as wealth tax, gift tax, fringe benefit tax and banking cash transaction tax — were abolished, but many related sections continued to clutter the statute.
The old Act comprised around 298 sections across 23 chapters, many of which became obsolete or irrelevant. The new law cleans up this legacy, removing outdated provisions and presenting a consolidated, amendment-free statute that reflects the current tax regime.
No change in tax rates, but Budget changes will apply
Any changes in tax rates or slabs are typically announced through the Finance Act as part of the Union Budget presented every year on February 1. Accordingly, all tax proposals announced in the Union Budget for 2026-27 — covering individuals, corporates, HUFs and other taxpayers — will be incorporated into the new Income Tax Act, 2025.
This ensures continuity while allowing the simplified law to remain fully aligned with the latest policy decisions.
Key structural changes taxpayers should note
One of the most important reforms is the simplification of the tax timeline. The long-standing distinction between the “previous year” and the “assessment year” has been removed. The new law introduces a single ‘tax year’ concept, making compliance easier and more intuitive.
Another significant relief is on TDS refunds. Under the new framework, taxpayers will be able to claim refunds of tax deducted at source even if they file their income tax returns after the due date, without facing penal consequences, an important change for delayed filers.
Rules and return forms to follow Budget 2026-27
While the Act itself takes effect from April 1, the rules for implementing the new law are currently being framed. These are expected to be notified after the presentation of the FY27 Union Budget. Subsequently, various procedural forms — such as those for advance tax payments, TDS and income tax returns — will also be notified in line with the new framework.
Legislative journey of the new law
The Income Tax Act, 2025, was approved by Parliament on August 12, 2025, after scrutiny by a Parliamentary committee. It became law after receiving the assent of Droupadi Murmu on August 21, 2025.
Have such reforms been attempted earlier?
This is not the first attempt to replace the 1961 Act. In 2010, the Direct Taxes Code Bill was introduced in Parliament and referred to a Standing Committee, but it lapsed following a change in government in 2014. Later, in November 2017, the government constituted a six-member committee to redraft the income tax law, which submitted its report to the finance minister in August 2019. The Income Tax Act, 2025 is the culmination of that long reform process.
From April 1, India’s direct tax regime will become simpler, clearer and more modern legal foundation. While taxpayers will not see immediate changes in tax rates, they can expect easier compliance, reduced confusion and fewer disputes. With Budget-driven changes seamlessly integrated into the new law, the Income Tax Act, 2025, marks a structural shift aimed at making taxation more transparent and taxpayer-friendly.
(With PTI Inputs)
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January 11, 2026, 13:45 IST
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Charles Brohiri, 29, pleaded guilty to travelling without buying a ticket a total of 112 times over a two-year period, Westminster Magistrates’ Court heard.
He could be ordered to pay more than £18,000 in unpaid fares and legal costs, the court was told.
He will be sentenced next month.
District Judge Nina Tempia warned Brohiri “could face a custodial sentence because of the number of offences he has committed”.
He pleaded guilty to 76 offences on Thursday.
It came after he was convicted in his absence of 36 charges at a previous hearing.
During Thursday’s hearing, Judge Tempia dismissed a bid by Brohiri’s lawyers to have the 36 convictions overturned.
They had argued the prosecutions were unlawful because they had not been brought by a qualified legal professional.
But Judge Tempia rejected the argument, saying there had been “no abuse of this court’s process”.
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Media reports suggest that the launch will happen independently and not under the JSW MG Motor India joint venture. The SUV will wear a JSW badge and name, instead of the Jetour branding. The upcoming SUV will be assembled at JSW’s upcoming greenfield manufacturing facility in Chhatrapati Sambhaji Nagar, Maharashtra.
According to the reports, the company plans to have the vehicle on sale by the third quarter of this year. With this move, JSW aims to establish itself as a standalone carmaker in India.
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The SUV is likely to arrive with a 1.5-litre plug-in hybrid setup. Internationally, this hybrid powertrain is offered with both front-wheel drive and all-wheel drive options. It is still unclear which version will be introduced in India.
Design
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The SUV measures around 4.7 metres in length and nearly 2 metres in width. This makes it larger than the Tata Safari, even though it is a five-seater. A longer 7-seat version is also sold in some markets.
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Jetour
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John Swinney has been pressed over whether this week’s Scottish Budget gives some workers the “smallest tax cut in history” – with Tory leader Russell Findlay branding the reduction “miserly” and “insulting”.
The Scottish Conservative leader challenged the First Minister after Tuesday’s Holyrood Budget effectively cut taxes for lower earners, by increasing the threshold for the basic and intermediate bands of income tax.
But Mr Findlay said that would leave workers at most £31.75 a year better off – saying this amounts to a saving of just £61p a week
“That wouldn’t even buy you a bag of peanuts,” the Scottish Tory leader said.
“John Swinney’s Budget might even have broken a world record, because a Scottish Government tax adviser says it ‘maybe the smallest tax cut in history’.”
Raising the “miserly cut” at First Minister’s Questions in the Scottish Parliament, Mr Findlay demanded to know if the SNP leader believed his “insulting tax cut will actually help Scotland’s struggling households”.
The attack came as the Tory accused the SNP government of increasing taxes on higher earners, with its freeze on higher income tax thresholds, which will pull more Scots into these brackets.
This is needed to pay for the “SNP’s out of control, unaffordable benefits bill”, the Conservative added.
Mr Findlay said: “The Scottish Conservatives will not back and cannot back a Budget that does nothing to help Scotland’s workers and businesses.
“It hammers people with higher taxes to fund a bloated benefits system.”
Hitting out at Labour – whose leader Anas Sarwar has already declared they will not block the government’s Budget – Mr Findlay said: “It is absolutely mind-blowing that Labour and other so-called opposition parties will let this SNP boorach of a budget pass.
“Don’t the people of Scotland deserve lower taxes, fairer benefits and a government focused on economic growth?”
Mr Swinney said the Budget “delivers on the priorities of the people of Scotland” by “strengthening our National Health Service and supporting people and businesses with the challenges of the cost of living”.
He insisted income tax decisions in the Budget would mean that in 2026-27 “55% of Scottish taxpayers are now expected to pay less income tax than if they lived in England”.
The First Minister went on to say that showed “the people of Scotland have a Government that is on their side”.
Referring to polls putting his party on course to win the Holyrood elections in May, the SNP leader added that “all the current indications show the people of Scotland want to have this Government here for the long term”.
Benefits funding is “keeping children out of poverty”, he told MSPs, adding the Budget contained a “range of measures” that would build on existing support.
The First Minister said: “What that is a demonstration of is a Government that is on the side of the people of Scotland and I am proud of the measures we set out in the Budget on Tuesday.”
Meanwhile he said the Tories wanted to make tax cuts that would cost £1 billion, with “not a scrap of detail about how that would be delivered”.
With the weekly leaders’ question time clash coming less than 48 hours after the draft 2026-27 Budget was unveiled, the First Minister also faced questions from Scottish Labour’s Anas Sarwar, who insisted that the proposals “lacks ambition for Scotland”.
Pressing his SNP rival, the Scottish Labour leader said: “While he brags about his £6 a year tax cut for the lowest paid, one million Scots including nurses, teachers and police officers face being forced to pay more.
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Mr Swinney, however, said that many public sector workers would be better off in Scotland.
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“A qualified teacher at the bottom of the band will take home £6,365 more after tax in Scotland than the equivalent in England. There are the facts for Mr Sarwar.”
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