Overview

• The government published the Income-tax Act, 2025 in the Official Gazette on August 22 after President Droupadi Murmu’s assent on August 21, with enforcement set for April 1, 2026.
• The overhaul removes redundant provisions, cutting sections from 819 to 536 and chapters from 47 to 23, reducing the text to about 260,000 words, and adding 39 tables and 40 formulas.
• Finance Minister Nirmala Sitharaman said no new tax rates are introduced, framing the exercise as a simplification of language and structure rather than a fiscal change.
• Drafted in roughly six months and revised after a Select Committee review, the final text incorporates fixes such as refunds for late-filed returns, restoration of Section 80M, access to Nil TDS certificates, and an exemption for anonymous donations to purely religious trusts.
• Implementation work now shifts to issuing rules, FAQs and guidance, along with upgrading or rebooting Income Tax Department IT systems, as the law also retains ‘virtual digital space’ provisions allowing access to emails and social media during searches.