1. New Income Tax Act Comes Into Force (April 1, 2026)
The Income Tax Act, 2025 will replace the old 1961 law from 1 april 2026, marking the biggest overhaul in decades. This new act aims to simplify and modernise tax rules across the board — including forms, filing timelines, TDS and tcs provisions.
2. Simplified ITR Forms and Filing Process
- The Income Tax Department is redesigning all ITR forms under the new Act to make them more user‑friendly and easier to understand.
- Official new forms will be notified soon so taxpayers can prepare well before the next filing season.
3. Extended ITR Filing Deadlines
To reduce compliance stress, the government has extended the deadline for filing and revising ITRs:
- Revised returns now can be filed up to 31 March (instead of December 31) on payment of a nominal fee.
- Certain business and non‑audit return deadlines have also shifted later (e.g., august for some cases).
This gives taxpayers more time to correct mistakes and claim refunds.
4. No Changes in Tax Slabs — But Big Procedural Reforms
While income tax slabs and rates remain unchanged for FY 2025‑26 and FY 2026‑27, the focus is on streamlining rules rather than cutting rates. The new Act reduces legal clutter by roughly 50% of sections and provisions, making compliance clearer.
5. TDS & TCS: Lower Rates and Better Clarity
➡️ tcs Reductions
Tax Collected at Source (applies when spending money on certain services or remittances):
- Overseas tour packages — now flat 2%, down from up to 20%.
- Education and medical remittances abroad under LRS — reduced to 2% from 5%.
These changes immediately benefit families and travellers by lowering upfront tax collections, improving cash flow.
➡️ TDS Rule Reforms
- TDS/TCS correction windows are being tightened — the window to file correction statements will be reduced from 6 years to 2 years from the end of the relevant financial year from 1 April 2026. This means all pending corrections for earlier years must be done by 31 March 2026.
- More categories (like manpower services) have clearer TDS applicability under the new law.
6. ITR Form Content Changes (Earlier Updates)
For the ongoing assessment year (YA 2025‑26) under the old law:
- Some forms like ITR‑1 and ITR‑4 Sugam have been updated to expand eligibility (e.g., allowing certain capital gains up to ₹1.25 lakh).
- Disclosure thresholds for assets and liabilities in some schedules were increased (e.g., for ITR‑3), reducing filing burden on smaller taxpayers — although these applied in FY 2025 updates under the old rules.
7. More Time & Relief for NRIs
Recent reforms include:
- Simplified TDS on property sales by NRIs (payer using PAN‑based challan rather than a separate TAN).
- Other overseas income reporting and asset disclosure relaxations have been introduced to ease compliance for non‑resident Indians.
What This Means for You
✔ Easier-to-understand and redesigned tax forms.
✔ More time to file and revise returns (fewer penalties).
✔ Lower tcs on foreign remittances and travel.
✔ Tighter deadlines for correcting TDS/TCS errors.
✔ A simpler, modern Income Tax Act replacing the six‑decade‑old law.
Disclaimer:
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
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