The New Income Tax Act, 2025: Draft Rules and Forms Released by Tax Department
Recently, the tax department unveiled draft rules and forms under the upcoming Income Tax Act of 2025. The main aim of these new regulations is to streamline provisions, reduce compliance burdens, and enhance taxpayer-friendliness for better understanding.
Set to replace the longstanding Income Tax Act of 1961, the new and simplified Income Tax Act of 2025 is scheduled to be implemented from April 1 onwards.
Stakeholders have been encouraged to provide feedback on the draft Income-tax Rules, 2026, along with the forms, by February 22. Following this consultation period, the finalized rules and forms for the new Act will be officially announced.
Compared to the current Income-tax Rules, 1962, which comprises 511 rules and 399 forms, the revised draft Income-tax Rules, 2026, now consist of 333 rules and 190 forms. The changes are primarily focused on eliminating redundancies and consolidating rules wherever feasible, as highlighted by the Income Tax department.
Furthermore, the updated income tax forms have been significantly simplified to enhance user-friendliness. Common information has been standardized across all forms to alleviate the compliance burden on taxpayers.
Overall, these developments aim to make the taxation process more efficient, transparent, and less cumbersome for individuals and businesses alike.
