New Income Tax Act 2025: CBDT readies forms & FAQs; 88% taxpayers shift to new regime

The Central Board of Direct Taxes (CBDT) will soon notify the required forms and rules, apart from a voluminous set of frequently asked questions (FAQs), ahead of the implementation of the new Income Tax Act, 2025, from April 1.

Forms, rules and FAQs to be notified before rollout

“We will be issuing the new income tax forms and rules within February. They will be opened for stakeholder consultation too before the new Income Tax Act of 2025 gets implemented from April 1, 2026,” Agrawal said.

CBDT working on detailed guidance material

Agrawal added that the Central Board of Direct Taxes was also “working on” preparing:

• A comprehensive set of frequently asked questions (FAQs)

• A presentation explaining the provisions of the new law

These materials will be made available to the public as the tax regime moves into the transition phase.

Aim to address rollout-related queries

Anticipating a large volume of queries and issues during the first quarter (April–June) following the rollout of the new Act, Agrawal said the presentations and FAQs would be useful for both taxpayers and income tax officials.

“These presentations and FAQs will come in handy for both the taxpayer and the taxman (I-T officials),” he said.

88% of individual taxpayers have opted for new tax regime: CBDT chief

He said choosing a particular tax regime remains the choice of taxpayers, but the response to the new regime has been “very good”.

Regime-wise adoption trends

“I can tell you that when ITR 1, 2, 3 and 4 are taken together (income tax return forms used by individuals), about 88 per cent of people have moved to the new tax regime,” Agrawal said.

He further added: About 97 per cent of taxpayers under presumptive taxation have opted for the new tax regime

For corporates, about 60 per cent of income is now being reflected under the new tax regime

Agrawal made these remarks during a post-Budget interview with PTI.

Old tax regime explained

The old tax regime refers to the income tax calculation and slab structure that existed before the introduction of the new tax regime in 2020. While the old regime has higher tax rates, it allows taxpayers to claim various deductions and exemptions.