Income Tax Department Central Board of Direct Taxes (CBDT) chief Ravi Aggarwal said on Monday that the Income Tax Department will notify ITR forms and rules under the Simplified Income Tax Act, 2025 by January. This Act will be effective from the next financial year starting from April 1. He said that the department aims to keep the income tax return form simple to ease compliance under the new law. The new law will replace the six-decade-old Income Tax Act, 1961.

CBDT chief gave information

Speaking to reporters after inaugurating the taxpayers’ lounge at the India International Trade Fair (IITF), Agarwal said, “We are in the process of preparing the forms and rules. We are working towards implementing these by January. So that taxpayers get adequate time to adapt their processes within their system.

He said that, its objective is to keep the Income Tax Return (ITR) form simple for the taxpayers so that compliance can be easy. The Income Tax Act, 2025 was passed by the Parliament on August 12. All the various forms applicable under the Income Tax Act, such as TDS quarterly return forms and ITR forms are being reworked.

Laws will be simplified

Income Tax Act 2025 will be applicable from the next financial year 2026-27 (April 1, 2026). The new Act will simplify tax laws and reduce verbosity in the law. Which will make it easier to understand. The new law does not impose any new tax rates and merely simplifies the language, which is necessary to understand the complex income tax laws.

The new law removes unnecessary provisions and archaic language and reduces the number of sections in the Income Tax Act of 1961 from 819 to 536 and the number of chapters from 47 to 23. The number of words in the new law has been reduced from 5.12 lakh to 2.6 lakh, and to increase clarity, 39 new tables and 40 new formulas have been included in place of the dense text of the 1961 law.