Quick Summary
With the Income Tax Act, 2025 notified last week and set to take effect from April 1, 2026, the Income Tax Department has begun drafting rules and forms to align with the new law. According to Ramesh Narain Parbat, Member (Legislation), Central Board of Direct Taxes (CBDT), the aim is to ensure simplified language, clarity and common terminology, mirroring the drafting approach of the new Act. The Department also plans to release a standard operating procedure (SOP) for handling digital data
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FAQ :
The new Income Tax Act is set to take effect from April 1, 2026.
The CBDT aims to finalise the rules and forms for the new Income Tax Act by the end of the year.
The SOP will outline the procedure for handling digital data under the new law, clarifying how tax authorities can access information during surveys, searches, and seizures.
No, the new framework explicitly articulates existing powers for accessing digital information but does not expand them. Privacy safeguards remain intact.
The new law introduces the 'tax year', which is the year income is earned, replacing the previous 'assessment year' terminology. Returns will still be filed in the following year.
Yes, the new Act is drafted in simple language to minimise disputes and interpretational issues, making it understandable for common taxpayers.
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