I-T Dept. To Notify ITR Forms, Rules of Simplified I-T Act By Next Year
The Income Tax Act, 2025 was passed by Parliament on August 12. All the different forms applicable under the Income Tax Act, like TDS quarterly return form and ITR forms, are being reworked, and the Directorate of Systems is working with the tax policy division to make the forms taxpayer-friendly
New Delhi: The income tax or I-T department will notify the ITR forms and rules under the simplified Income Tax Act, 2025 by January next year. It will come into effect from the next fiscal beginning April 1. The move of the government is to keep the I-T return forms simple to ease compliance under the new law, which replaces the six-decade old Income Tax Act.
Announcing it on Monday, Central Board of Direct Taxes (CBDT) chief Ravi Agrawal said that the department is in the process of designing forms and rules. “We are working towards putting this in place by January so that taxpayers have sufficient time to adapt their processes within their system. The intent is to keep the ITR forms simple for taxpayers to ease compliance,” Agrawal told reporters after launching the Taxpayers' Lounge at the India International Trade Fair (IITF).
The Income Tax Act, 2025 was passed by Parliament on August 12. All the different forms applicable under the Income Tax Act, like TDS quarterly return form and ITR forms, are being reworked, and the Directorate of Systems is working with the tax policy division to make the forms taxpayer-friendly. “After vetting by the law department, the rules will be notified and laid before Parliament,” one finance ministry official said.
Meanwhile, Agrawal also highlighted the tax collections, hoping that the budgeted income tax collections for FY26 at Rs 25.20 lakh crore will be met. When asked about delay in issuance of refunds, he said the department is analysing some of the refund claims which were ‘high-value or red-flagged’ by the system and have also written to taxpayers to file a revised return in case they have forgotten something.
"Low value refunds are being released. We have analysed and found that some wrong refunds or deductions were being claimed. So this is a continuous process. We hope to release the remaining refunds by this month or December. With regard to collection, direct tax mop-up is growing at 6.99 per cent as compared to last year, which is an encouraging trend. And, we hope that by the end of the year, we will be able to meet the targets. The taxpayer response has also been good,” Agrawal said.
The Income Tax Act, 2025 — the new law on income tax — will make tax laws simple and reduce wordage in the legislation making it easy to understand. The new legislation does not impose any new tax rate and has only simplified the language, which was required for understanding the complex income tax laws. The new law removes redundant provisions and archaic language and reduces the number of sections from 819 in the Income Tax Act of 1961 to 536 and the number of chapters from 47 to 23.
