TAX OVERHAUL: LESS PAPERWORK, MORE PAY

Taxes get simpler and bills get cheaper-real relief without any income-tax rate bikes, especially for the salaried middle class and small businesses.

- TDG NETWORK

On August 21-25, 2025, India's government formalized a sweeping rewrite of its tax laws.

The Income-tax Act, 2025—approved by Parliament on August 12 and assented to by the President on August 21—will replace the 1961 Income Tax Act effective April 1, 2026. Importantly, no new tax rates or slabs were introduced; the Finance Minister confirmed that tax rates announced in the February 2025 Budget remain unchanged. Instead, the overhaul aims to simplify the tax code: bulky, archaic language is cut, redundant provisions are removed, and sections are halved (from 819 to 536). Officials say the new law has been made "leaner and more focused" so a "common man may easily understand it with lesser effort." For example, concepts like "previous year" and "assessment year" are replaced by a single "tax year," and all rules on salary income have been grouped in one place. The law even consolidates dozens of TDS (tax-deducted-at-source) provisions into far fewer clauses for clarity. At the same time, several Select Committee suggestions were adopted: for instance, a clear exemption for lump-sum (commuted) pension receipts was added, an alternate minimum tax on LLPs was dropped, and charitable trust restrictions were relaxed.