I-Tax Act, 2025 gets President Droupadi Murmu’s assent , Pg9

Key Highlights:

• President Droupadi Murmu has approved the Income-tax Act, 2025, replacing the Income Tax Act, 1961.
• The Income Tax Act, 2025 will be effective from April 1, 2026, the start of the next financial year.
• The new Act aims to simplify tax laws by reducing complex language and wordage.
• Parliament passed the Income Tax Bill, 2025 on August 12, 2025.
• The new law reduces the number of sections from 819 to 536 and chapters from 47 to 23.

Detailed Insights:

• The primary goal of the Income-tax Act, 2025 is to make tax laws more accessible and easier to understand for the general public.
• The new Act focuses on simplifying the language of the existing income tax laws without introducing new tax rates.
• Redundant provisions and archaic language have been removed to streamline the legislation and reduce its overall size.
• The reduction in the number of sections and chapters is intended to make the law more concise and user-friendly.

Key Concepts Involved:

• Income Tax Act: A law that governs the levy, assessment, and collection of income tax on individuals and entities.
• Financial Year: A 12-month period used for accounting and budgeting purposes, starting on April 1 and ending on March 31 in India.
• Tax Laws: Rules and regulations that govern how taxes are calculated, collected, and administered by the government.