India’s Central Board of Direct Taxes (CBDT) has begun the massive task of revising rules and forms following the announcement of the Income Tax Act, 2025 in the Union Budget 2025-26. The new tax code aims to eliminate redundancies and simplify compliance while reducing the total word count by half compared to the previous Act. With the new law set to take effect from April 1, 2026, CBDT is working on aligning section references, streamlining procedures, and ensuring taxpayer-friendly reforms.
Following the announcement of the Income Tax Act, 2025 in the Union Budget 2025-26, India’s Central Board of Direct Taxes (CBDT) has commenced an extensive overhaul of income tax rules and forms. The new Act, which aims to eliminate redundancies and simplify tax compliance, will come into effect on April 1, 2026.
The CBDT, responsible for direct tax administration in India, will review and update existing tax rules to align them with the revised Act. A senior government official stated, “With the new Income Tax Act set for implementation, we must ensure that all rules and forms are updated accordingly. This process will begin next month and will be a comprehensive exercise.”
Major Changes Under the Income Tax Act, 2025
Unlike previous tax revisions, the new Act does not introduce new tax slabs but instead focuses on reducing complexity. The total word count of the law has been cut to 260,000 words, half the length of the previous Act, making it more concise and accessible.
CBDT will undertake a meticulous review to eliminate outdated provisions and align section numbers, ensuring that the compliance process is more transparent and efficient. Experts believe that simplifying the rules and procedural framework will provide clarity to taxpayers and reduce litigation.
Aiming for a Smooth Transition by 2026
With just over a year until implementation, CBDT is working under tight deadlines. The government’s aim is to minimize taxpayer confusion and ensure that once the new Act is enforced, the necessary procedural framework is already in place.
Finance Minister Nirmala Sitharaman has emphasized that tax law simplification remains a top priority for the government. The upcoming changes are expected to ease compliance burdens, making tax filing more straightforward for individuals and businesses alike.
As India moves towards a modernized tax regime, the success of this transition will depend on CBDT’s efficiency in implementing the revised framework before the 2026 deadline.
