Income Tax Act, 2025 Receives Presidential Assent
The Income Tax Act, 2025, replacing the decades-old 1961 law, was notified by the Government of India in the Official Gazette on Friday, August 22, 2025, following President Droupadi Murmu’s assent on August 21, 2025.
The Income Tax India handle on X (formerly Twitter) highlighted the historic development:
“The Income-tax Act, 2025 has received the Hon’ble President’s assent on 21st Aug 2025. A landmark reform replacing the 1961 Act, it ushers in a simpler, transparent & compliance-friendly direct tax regime.”
The new Income Tax laws will come into effect from April 1, 2026.
Parliamentary Approval and Scope
Passed during the Monsoon Session of Parliament 2025, the Income Tax Act, 2025, extends to the whole of India. The government describes it as a comprehensive overhaul of the existing tax system after more than six decades.
“This Act may be called the Income-tax Act, 2025. It extends to the whole of India,” the official notification states.
Key Features of the Income Tax Act, 2025
- Simplified Structure:
The new Act reduces complexity in taxation by replacing archaic language with simpler, easy-to-understand terminology for common taxpayers. - Fewer Sections and Chapters:
- Sections reduced: 819 → 536
- Chapters reduced: 47 → 23
- Elimination of Redundant Provisions:
Outdated and repetitive clauses from the 1961 Act have been removed to create a clearer, concise, and taxpayer-friendly document. - Compliance-Friendly Regime:
The new framework emphasizes transparency, simplicity, and ease of compliance, aiming to reduce disputes and streamline direct tax processes.
Implications for Taxpayers
The Income Tax Act, 2025 marks a major reform in India’s taxation landscape. Taxpayers can expect:
- Easier understanding of tax obligations
- Simplified filing and compliance procedures
- Reduced ambiguity in provisions
