Income Tax – Big news has come for investors and taxpayers regarding the Income Tax Department. CBDT (Central Board of Direct Taxes) has told that a committee has been formed to make tax rules easy and transparent and new rules will be implemented by the end of the year.

Work on new rules

A committee has been formed which is preparing a draft of simplification and new rules. Public opinion has been received. Thousands of suggestions have been received from the public in consultation. By the end of the year, new rules will be in a position to be implemented. Action is taken only when the department has solid evidence. No income tax authority can share taxpayer data unless it is allowed in the law.

Meaning for investors and taxpayers- The simplified rules that will come by the end of the year will make tax compliance easier. Clarity on the privacy of taxpayer data will increase trust. Transparency and simplicity of tax regulations is positive for the market and investment environment. This move of CBDT is a big change towards creating a taxpayer-friendly environment. This will make it easier to understand and follow tax laws.

There has been a big change in the tax system in India. The Income Tax Act, 2025 has received the President’s approval and will come into force from April 1, 2026. This new law will replace the Income Tax Act of 1961, which was more than six decades old. What’s new – Fewer words, clearer language: The new law has been written in 2.6 lakh words, down from 5.12 lakh words.

The old law had 819 sections and 47 chapters. The new law has only 536 sections and 23 chapters. Now the words Tax Year will be used instead of Assessment Year (AY) and Financial Year (FY), which will end the confusion. New style: For the first time, 39 tables and 40 formulas have been added to make the rules simple and clear.

Tax slabs

The existing slabs for salaried, businessmen and professionals will remain the same for now. Virtual Digital Space clause: Income tax officers will be able to access your email and social media during investigation. This provision has been retained. Why did the government make this change- The old law had heavy and archaic language, which common taxpayers could not understand. Many provisions were useless or repetitive. The government wanted the law to be short, clear and compliance-friendly.