Rules for Income Tax Act, 2025 by End of Year, says Reports
Rules for Income Tax Act, 2025 to be Ready by December 31: CBDT
Rules - Income Tax Act - 2025 - End of Year - Reports - taxscan
Rules - Income Tax Act - 2025 - End of Year - Reports - taxscan
The Central Board of Direct Taxes (CBDT) will notify the rules and regulations for the new Income Tax Act, 2025 by December 31, according to RN Parbat, Member (Legislation) of the Board. The new law will take effect from April 1, 2026, replacing the Income Tax Act of 1961.
Parbat said the drafting process is at an advanced stage in an interview with Businessline. A committee was formed on February 13, the day the Bill was introduced in Parliament, and has since held public consultations and reviewed thousands of suggestions from trade bodies and professionals. Draft rules and forms are ready and under examination by the Tax Policy and Legislation (TPL) Division. Once finalised, they will be cleared by the Finance Minister and the Law Ministry before being laid before Parliament.
Income Tax Bill 2025: What’s New, What’s Gone, and What You Must Know! Click here
He assured taxpayers that data privacy will be maintained. Addressing apprehensions about access to digital information, he noted that such provisions already exist in the 1961 Act and are only invoked during search, seizure, or survey operations, which are infrequent. Disclosure of personal information remains barred under the Act, now covered under Section 258. A Standard Operating Procedure (SOP) on handling digital data will also be issued, consistent with the Data Protection Act and recommendations of the Select Committee.
On implementation, Parbat clarified that return filing for FY 2025-26 will continue under the old Act. Changes under the new law will begin from FY 2026-27. The CBDT is working on simpler, smarter return forms with pre-filled data and common terminology to ease compliance. Quarterly TDS filing and other system changes will start from 2026.
The Future of Taxation is Here – Unravel the Income Tax Bill 2025! Click here
The Finance Minister has already indicated that FAQs, SoPs, and an information guide mapping old provisions with new ones will be released to help taxpayers transition. Many forms will be required immediately from 2026, while others will be phased in later.
Responding to criticism that the 1961 Act lost coherence due to frequent amendments, Parbat said income tax laws must evolve with economic realities. Provisions on international taxation, transfer pricing, and anti-avoidance were introduced gradually as needed. The current overhaul, he said, has simplified the law, removed redundancy, and will ensure future amendments remain consistent in structure and language for easier understanding.
With this timeline, the CBDT aims to provide clarity and certainty before the new Act becomes operational in 2026.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
