New Income Tax Law From April 1: CBDT Getting Ready For The Rollout

The Central Board of Direct Taxes (CBDT) has started internal work to prepare for the rollout of the new Income Tax Act, 2025, which is slated to come into force from April 1, according to a recent report by the Deccan Chronicle.

The upcoming law will replace the Income Tax Act of 1961, bringing to a close a statute that has been stretched repeatedly through amendments over the last six decades. Senior officials see the rewrite as necessary, given how difficult the existing law has become to read, interpret, and administer.

A Long-Overdue Rewrite

The current income tax law has grown bulky over the years. New provisions were added without removing old ones, explanations multiplied, and exceptions became the rule rather than the exception. For taxpayers, even routine compliance often required professional help. For officers, interpretation varied across regions.

Officials involved in the exercise say the intention behind the new Act is not to change the fundamentals of taxation but to present the law in a clearer and more coherent form. Several provisions have been moved around, some have been removed altogether, and the wording has been tightened to cut down on confusion.

The expectation is that a cleaner statute will also mean fewer disputes, particularly in cases where interpretation, rather than evasion, has been the root of conflict.

What’s Happening Inside The Department

Within the CBDT, officers have been asked to begin familiarising themselves with the structure of the new law ahead of its implementation. Work is underway on drafting new rules and operational guidelines that will sit under the Act once it becomes effective.

The department is also preparing fresh formats and procedures to align with the rewritten provisions. Training programmes are expected to follow, aimed at ensuring that officers apply the new law consistently from the start.

Officials have been told that the first year of transition will be closely watched. Any confusion or uneven implementation could undermine the credibility of the reform, particularly among individual taxpayers and small businesses.

Digital Systems To Carry More Weight

The new Income Tax Act is expected to dovetail with the department’s existing digital framework. Much of the department’s work has already moved online, and the new law is being written to match how assessments and grievances are now handled.

The department plans to focus on cases that throw up red flags, instead of running routine checks on everyone. The idea is to let compliant taxpayers pass through with minimal friction while focusing attention where red flags exist.

Younger officers, already accustomed to working with data-driven systems, are expected to take the lead in this shift.

What Taxpayers Should Watch For

For taxpayers, the immediate change will not be in tax rates or slabs. The difference is expected to lie in how provisions are structured and communicated.

Clearer drafting could make compliance easier and reduce back-and-forth with the department. That said, tax professionals point out that much will depend on how quickly rules are notified and how the transition is managed in practice.

As April approaches, more clarity on procedures is expected. For now, the CBDT’s internal messaging suggests the focus is firmly on making the law easier to live with, not tougher to navigate.