Rules under Income Tax Act, 2025 and ITR forms to be notified by January: CBDT chief

The Income Tax department is set to notify Income Tax Returns (ITR) forms and related rules under the simplified Income Tax Act, 2025 by January 2026, Central Board of Direct Taxes (CBDT) chief Ravi Agrawal said.

The act, coming into effect from April 1, will replace the six-decade old Income Tax Act of 1961.

The new I-T Act has been aimed at keeping the ITR forms simple and ease compliance, Agarwal said.

"We're in the process of designing forms and rules. We're working towards putting this in place by January so that taxpayers have sufficient time to adapt their processes within their system," Agrawal told reporters after launching the Taxpayers' Lounge at the India International Trade Fair (IITF) in New Delhi.

The Income Tax Act, 2025, was passed by the Parliament on August 12. It was announced by Finance Minister Nirmala Sitharaman during her Budget speech on February 1.

Under the new framework, all different forms under the Act, including TDS quarterly return form and other ITR forms, are being reworked.

Furthermore, Directorate of Systems is working with the tax policy division to make the forms taxpayer-friendly.

Following the inspection by the law department, the rules will be notified and be presented before the Parliament.

The new law does not impose any new tax rate and has only simplified the language, which was required for understanding the complex income tax laws.

It removes redundant provisions and archaic language and reduces the number of sections from 819 in the Income Tax Act of 1961 to 536 and the number of chapters from 47 to 23.

The number of words has been reduced from 5.12 lakh to 2.6 lakh in the new law, and it has introduced 39 new tables and 40 new formulas, replacing the dense text of the 1961 law, to enhance clarity.

(with inputs from agencies)