India's New Income Tax Act 2025 Takes Effect April 1

India's tax landscape underwent a significant transformation on April 1, 2026, as the new Income Tax Act, 2025, replaced the longstanding Income Tax Act, 1961, ushering in simplified regulations and several budgetary measures aimed at easing compliance for taxpayers nationwide. The changes, effective at the start of the 2026-27 fiscal year, include adjustments to securities transaction taxes, remittance charges, and incentives for the data centre sector, alongside broader financial reforms affecting salaries, travel, and everyday transactions.

The new Act streamlines the tax framework by eliminating the distinction between assessment year and previous year, introducing a unified "tax year" concept to make provisions more logical and accessible. Officials from the Income Tax Department stated that the e-filing portal would support compliance under both the old and new Acts during the transition period. Assessments, appeals, and proceedings from prior years will continue under the 1961 Act until resolved, while taxpayers filing returns for the 2026-27 tax year in July 2026 must use old forms for periods governed by the previous law. Advance tax payments starting June 2026 will...