Kar Setu – FAQs on Interplay and Transition Simplify India’s Shift to Income Tax Act, 2025
The document simplifies complex provisions, reduces forms and sections, and ensures continuity so taxpayers experience a smooth, transparent shift to the new regime.
The Income Tax Department has unveiled “Kar Setu – FAQs on Interplay and Transition”, a comprehensive guidance document designed to help taxpayers, professionals, and officials navigate the shift from the Income-tax Act, 1961, to the Income-tax Act, 2025, which comes into effect on April 1, 2026.
The initiative demonstrates the government's commitment to simpler, transparent, and taxpayer-friendly lawmaking, ensuring a smooth, predictable, and clear transition.
At the release, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal described the FAQs as a “bridge between what has been and what lies ahead,” noting that the document addresses practical concerns such as pending proceedings, return filing obligations, continuity of TDS compliance, and the status of appeals.
CBDT Member G. Aparna Rao stated that the new Act rationalizes the structure, consolidates provisions, and reduces complexity, making compliance easier for honest taxpayers.
The FAQ compendium covers ten thematic areas, including:
- General philosophy of the transition and repeal framework
- Tax payments, refunds, and TDS compliance
- Return filing obligations during the transition year
- Reassessment and dispute resolution mechanisms
- Carry forward of losses and NRI-specific provisions
Key highlights include the replacement of the “Assessment Year” concept with a unified “Tax Year”, reduction of sections and forms by nearly half, and assurance that PAN, TAN, faceless assessments, and existing approvals remain valid.
Professional bodies such as the Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI), Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry(FICCI), Associated Chambers of Commerce and Industry of India(ASSOCHAM), and PHD Chamber of Commerce and Industry(PHDCCI) contributed inputs, reflecting the consultative approach of the Board.
The FAQs are intended to instill confidence, reduce uncertainty, and promote voluntary compliance during this historic transition.
Both acts will run in parallel for a short period, with the e-filing portal supporting dual compliance tracks to ensure taxpayers face no hardship.
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