Simplifying India's Tax Regime: The New Income-tax Act, 2025
UPSC Relevance
Prelims: Indian Economy and Social Development (Fiscal Policy, Government Budgeting, Taxation in India).
Key Highlights from the News
With the President's approval, the new Income-tax Act, 2025 has become law.
This new law replaces the complex and outdated Income Tax Act, 1961.
The new law will come into effect from the next financial year, starting April 1, 2026.
Main Objective: To simplify tax laws, reduce the number of words in the law, remove outdated provisions, and thereby help common people easily understand the law.
The new law does not change the existing tax rates. It is merely a step towards simplifying the law.
The structure of the law has been simplified by reducing the number of sections from 819 to 536 and the number of chapters from 47 to 23.
COMMENTS