Key Tax Changes Introduced During PM Modi’s 12-Year Tenure

As Prime Minister Narendra Modi completes 12 years in office, various significant tax-related reforms have been introduced over this period with the goal of simplifying tax rules, improving compliance and making processes more transparent. These changes have covered both direct and indirect taxation. Below are some of the key changes brought in during this time.

GST Reform

The Goods and Services Tax was introduced on 1 July 2017. It replaced multiple central and state taxes with a single nationwide system that creates a unified market. Last year, GST rates were rationalised into key slabs of 5 per cent and 18 per cent. Life-saving drugs and medicines have also seen rates reduced from 12 per cent to nil or 5 per cent to improve healthcare affordability.

New Tax Regime

The new tax regime introduced in Budget 2020 offers lower tax rates with fewer exemptions and deductions. Under the current structure, income is taxed as per slab rates starting from Rs 4 lakh.

The system also includes Section 87A rebate benefits, which have been expanded over time, resulting in zero tax liability for eligible taxpayers on income up to Rs 12 lakh. Salaried employees and pensioners can also claim a standard deduction of Rs 75,000 under the new regime and Rs 50,000 under the old regime.

Income Tax Act, 2025

A key tax reform during PM Modi’s tenure was the introduction of the Income-tax Act, 2025, which replaced the earlier Income-tax Act, 1961 framework. Effective from April 1, 2026, the act aims to simplify tax rules, reduce legal complexity and improve ease of compliance for taxpayers. The tax rules in the new income tax act were reduced from 399 to 190, and tax forms were cut from 511 to 333.

Digital And Faceless Tax Administration

The government has expanded digital platforms for tax services such as notices, assessments and refunds. Tools such as the Annual Information Statement and Taxpayer Information Summary provide taxpayers with a consolidated view of financial transactions. So, to minimise the face-to-face contact between the taxpayer and the tax officials, faceless assessment and faceless appeal have been introduced.

Pre-Filled ITRs Make Tax Filing Easier

The government has made income tax return filing easier via pre-filled ITR forms where key details like salary, bank interest and TDS are automatically filled by the Income Tax Department. The facility was first introduced in 2019 for select return forms and was later expanded after the Union Budget 2021 to make filing easier and improve accuracy for taxpayers.