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The rules under the Income-tax Act 2025 will be related to the computation of liabilities, refund processes, and exemptions, among others.
The central government on August 22 notified the Income-tax Act, 2025, in the Official Gazette.
The central government is likely to notify all rules related to the Income-tax Act 2025, by December 31 through a single consolidated notification, Moneycontrol has reported citing a senior government source.
The report added that the new framework will have 400 rules and 180 forms, which is significantly less than the 500-plus rules under the existing income tax law.
“By December 31, we will notify all the rules in one consolidated notification. Budget work will also start simultaneously. Systems will have a lot of work — we will test the rules, do a test run, and coordinate extensively in the fourth quarter,” Moneycontrol cited the official as saying.
The rules will be related to the computation of liabilities, refund processes, and exemptions, among others. The forms will have the format for businesses and individuals to report tax-related information.
After the rules are notified, extensive backend work will continue through the fourth quarter of FY25 to ready the IT infrastructure.
According to the report, forms are being compiled and merged, and prototypes will be created and tested before they are enabled on the system.
“Before enabling the forms on the system, after notification, utilities will be formed. Prototypes will be tested, integrated with data, and checked. Each form requires detailed development, integration, and test checking. This work will intensify in the fourth quarter,” the official told Moneycontrol.
As the new law will come into force from April 1, 2026, the computer systems of the Income Tax department are required to be rebooted to operationalise the new legislation.
About the Income-tax Act, 2025
The central government on August 22 notified the Income-tax Act, 2025, in the Official Gazette. It came a day after the President gave assent to the Act on Thursday. The Act, which will come into effect from April 1, 2026, consolidates and amends the existing Income Tax Act, 1961.
“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. Access the official document here: https://egazette.gov.in/(S(p0hzyo3qrxli3juyloktgdrv))/ViewPDF.aspx,” Income Tax India said in a post on X on August 22.
The new Act removes redundant provisions and archaic language and reduces the number of Sections from 819 in the Income Tax Act of 1961 to 536 and the number of chapters from 47 to 23. The number of words had been reduced from 5.12 lakh to 2.6 lakh in the new Income Tax Bill, and for the first time, it introduces 39 new tables and 40 new formulas, replacing the dense text of the 1961 law to enhance clarity.
The new Income Tax Bill was drafted within a record time of six months and introduced in the Budget session in February 2025. It was referred to the Select Committee for a comprehensive study of the Bill. Subsequently, in order to incorporate the suggestions made by the Committee, the Bill (No.1) was withdrawn and a fresh Bill (No.2) was introduced in the monsoon session of Parliament.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
October 17, 2025, 15:47 IST
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