Income Tax Act, 2025 comes into effect from 1st April 2026, Rules and Forms will be Notified Shortly: FM [Read Finance Bill 2026]

The Union Budget for the Financial Year 2026-27 was presented by Finance Minister Nirmala Sitharaman in the Lok Sabha today (Sunday, 1 February 2026). This is her 9th consecutive budget.

FinanceMinister Nirmala Sitharaman has confirmed that the new Income Tax Act, 2025 will come into force with effect from 1 April 2026.

The Minister further clarified that the detailed Rules, compliance procedures, and statutory Forms under the new law will be notified shortly. This allows taxpayers, professionals, and institutions to prepare in advance for the transition from the existing Income-tax Act, 1961.

While the principal legislation will take effect from the start of the next financial year, the government will shortly release subordinate legislation including operational rules, return forms, reporting formats, and procedural guidelines. So that stakeholders get adequate lead time to understand and adapt to the revised act.

The minister also proposed to reduce the TCS for the education and medical purposes under LRS from 5% to 2%. Also, it has announced that the revising of the incometax return will be allowed with a nominal fee from December 31st to March 31st.

The budget also proposed that the small Taxpayers can obtain Lower or Nil Deduction Certificates without Approaching the Assessing Officer. The minister also said that the new simplified rules and forms under the new income tax act, 2025 will be out soon.

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