🔔 New Law in Force from Apr 01, 2026
Income Tax Act, 2025 – Complete Text, Updates & Tools
Notified on 21st August 2025, this Act replaces the Income Tax Act, 1961. Access the full text, key highlights, updates, and resources for taxpayers and professionals.
Track all Notifications & Circulars under the Income Tax Act, 2025.
Overview of the Income Tax Act, 2025
The Income Tax Act, 2025 has been enacted to replace the six-decade-old Income Tax Act, 1961. This new law is designed to simplify compliance, modernize provisions for the digital economy, reduce litigation, and align India’s taxation framework with current global practices.
Journey of the Income Tax Act 2025
Feb 2025
Income Tax Bill, 2025 introduced in Lok Sabha.
Mar 2025
Bill referred to Select Committee of Parliament for review.
Aug 8, 2025
Govt withdraws the Bill to incorporate suggested changes.
Aug 21, 2025
Income Tax Bill (No. 2), 2025 assented by the President of India.
Aug 21, 2025
Income Tax Act, 2025 Published in the Gazette of India (Extraordinary)
Key Highlights of the Income Tax Act, 2025
Detailed Overview
The Income Tax Act, 2025 marks a landmark reform in India’s taxation framework. It consolidates multiple provisions and streamlines compliance procedures, ensuring greater clarity for taxpayers and professionals.
With its emphasis on simplification, the Act reduces ambiguities and brings uniformity across income heads. Digital integration and stronger compliance mechanisms are also central to this reform.
Overall, the Act represents a step forward in aligning India’s tax structure with global best practices while focusing on transparency and efficiency.
Frequently Asked Questions (FAQs)
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When does the Income Tax Act, 2025 come into effect?
The Provisions of the Income Tax Act, 2025 comes into effect on April 1, 2026 (F.Y. 2026-27 onwards) and extends to the whole of India.
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What are the major differences between the Income Tax Act, 1961 and the Income Tax Act, 2025?
Core structure and the taxation framework remains in the new act. Key differences include restructuring of sections, removal of redundant provisions, and increased digitisation in assessments and appeals. A detailed section-by-section comparison is available on the section comparison part of our website. Follow the link: https://taxroutine.com/section-comparison
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Will tax rates change under the Income Tax Act, 2025?
The rates of tax for every assessment year were notified only through the Finance Act of the relevant years in the erstwhile Act (Income Tax Act, 1961). The same framework continues to exist in the Income Tax Act 2025 also. Rates of Tax will continue to be notified through the Finance Acts and the rates for the default regime through amendments in Section 202 of the Income Tax Act, 2025. (Section 115BAC of Income Tax Act, 1961)
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Does the New Income Tax Act affect ongoing assessments or appeals?
No. The ongoing assessments and the assessments upto the A.Y. 2026-27 will be governed under the Income Tax Act, 1961. Section 536 of the Income Tax Act, 2025 repeals the previous Act, however, the savings provisions of the act holds intact any proceeding to be undertaken for any assessment prior to A.Y. 2027-28. Therefore the New Income Tax Act does not affect any ongoing assessments or appeals.
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Where can I access Rules, Notifications and Circulars relating to the Income Tax Act, 2025?
TaxRoutine offers a dedicated section on the website to track changes in respect of the Rules, Notifications and Circulars relating to the Income Tax Act, 2025. As on the date of publication of these FAQs, no Rules, Notifications and Circulars have been notified or issued by the Government of India.