Key Highlights of the New Income-tax Act, 2025

The Income-tax Act, 2025 came into force on 1 April 2026, replacing the Income-tax Act, 1961 that had governed direct taxation in India for over sixty years. The new Act is largely a structural overhaul rather than a change in tax policy — the aim is a simpler, clearer, and more navigable law. What stays the same: tax rates and slabs are unchanged, and existing deductions and exemptions broadly continue. Income earned up to 31 March 2026 remains governed by the 1961 Act, and pending proceedings continue under transitional provisions, so there is no abrupt disruption for taxpayers or professionals. What changes: the Act consolidates and reorganises provisions into a cleaner structure with simplified language and fewer cross-references. It introduces the concept of a single "Tax Year," replacing the earlier "previous year" and "assessment year" terminology. Compliance-related processes, including the faceless assessment and appeal framework, continue under the new Act. For businesses and individuals, the practical priority in the coming months is understanding the revised section references and updated forms. Our team is actively tracking the notified rules and will advise clients on any action needed to stay fully compliant under the new regime. This post is for general information only and does not constitute professional advice. Please consult our team for guidance specific to your situation.