The Income Tax Department will notify the ITR forms and rules under the simplified Income Tax Act, 2025, by January, ahead of its implementation from the next fiscal year starting April 1, Central Board of Direct Taxes (CBDT) chief Ravi Agrawal said on Monday.
"The intent of the department 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, 1961," he said.
"We are 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," Agrawal told reporters after launching the Taxpayers' Lounge at the India International Trade Fair (IITF).
He added that the objective is to keep the income tax return (ITR) forms simple for taxpayers to facilitate compliance.
The Income Tax Act, 2025, which was passed by Parliament on August 12, will simplify tax laws without introducing any new tax rates.
All forms under the new Act, including TDS quarterly return forms and ITR forms, are being redesigned, with the Directorate of Systems working alongside the tax policy division to make them taxpayer-friendly. After vetting by the law department, the rules will be notified and laid before Parliament, an official said.
The new law, effective from April 1, 2026, aims to make tax legislation easier to understand by reducing complex language, removing redundant provisions, and streamlining archaic sections. The number of sections has been cut from 819 in the Income Tax Act of 1961 to 536, and chapters reduced from 47 to 23.
The total word count has been reduced from 5.12 lakh to 2.6 lakh, and the Act now includes 39 new tables and 40 new formulas, replacing dense text from the 1961 law to enhance clarity.