Government Set to Notify All Rules Under New Income Tax Law By December 31

The government is planning to notify the rules under the new Income Tax Act 2025 by the end of December. These rules would lay down the operational backbone of the new tax laws and lead the way away from the six-decade old Income-tax Act of 1961.

According to a senior government official, the entire set of rules will be issued through a single consolidated notification by the year-end.

“By December 31, we will notify all the rules in one consolidated notification. Budget work will also start simultaneously. Systems will have a lot of work, we will test the rules, do a test run, and coordinate extensively in the fourth quarter,” Moneycontrol quoted the senior official as saying.

What Would The New Tax Rules Look Like?

The new framework will have around 400 rules and 180 forms, compared to over 500 rules under the existing structure.

The new tax laws are designed to be shorter to simplify compliance and improve administrative efficiency, which has been a long-standing demand of both taxpayers and professionals.

The tax rules will define the procedures for implementing provisions under the new law, such as how to calculate liabilities, claim exemptions, or process refunds. The forms will serve as the standard templates for filing returns or providing information.

Together, these form the functional core of the income tax system.

Once notified, backend work will intensify in the last quarter of financial year 2026 to prepare the digital infrastructure. The forms are being compiled and merged, and prototypes will be created and tested before they are enabled online.

“Before enabling the forms on the system, after notification, utilities will be formed. Prototypes will be tested, integrated with data, and checked. Each form requires detailed development, integration, and test checking,” the official added.

The systems integration will run parallel to the government’s Budget preparations, making the next few months crucial for the transition.

The new income tax law is part of a larger effort by the government to modernise the country’s tax code and reduce litigation.

By consolidating rules and redesigning forms, the government hopes to make the tax system easier to understand, digitally compatible, and less prone to disputes.

As per the current schedule, India is set to enter the next financial year with a completely new and transparent tax framework, one that aims to bring in simplification with efficient compliance mechanisms.