Income-tax Act, 2025 Comes into Force from 1 April 2026
Why in the news
India’s new direct-tax law took effect on 1 April 2026, ending the long run of the old income-tax statute and starting a simplified framework.
Key facts
- The Income-tax Act, 2025 became operational on 1 April 2026 and replaced the existing law that was over 60 years old.
- Parliament cleared the Bill on 12 August 2025; the President gave assent on 21 August 2025.
- The Income-tax Rules, 2026 were notified by the Central Board of Direct Taxes (CBDT) on 20 March 2026.
- New forms were notified with the Rules and redesigned to make filing and processing easier.
- The government said the change is about clearer drafting and administration, not a change in tax policy.
| Milestone | Date |
|---|---|
| Bill passed by Parliament | 12 August 2025 |
| Presidential assent | 21 August 2025 |
| Income-tax Rules, 2026 notified | 20 March 2026 |
| Act in force | 1 April 2026 |
About the reform
The overhaul rewrites India’s direct-tax statute in plainer, reader-friendly language with a cleaner structure. The CBDT, which sits under the Department of Revenue in the Ministry of Finance, issued the Rules and forms. The official release links the change to the vision of a developed India (Viksit Bharat).
Exam angle
- Remember the timeline: passed 12 Aug 2025, assent 21 Aug 2025, Rules 20 Mar 2026, effect 1 Apr 2026.
- The Act replaces the Income-tax Act, 1961; questions often ask which law was replaced.
- The CBDT is the authority that notified the Rules and forms.
- Policy rates were not changed; the focus is simplification.