Taxpayers alert: New ITR forms and rules under Income Tax Act 2025 to be notified by January 2026

The idea, he explained, is to give taxpayers plenty of time to understand the changes and to ensure that the new forms, which are set to replace the decades-old system, are simpler, clearer, and far more user-friendly before the new law kicks in next fiscal.

"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 at the India International Trade Fair (IITF), PTI reported.

The Income Tax Act, 2025

The new Act will come into force from the next financial year, starting April 1, 2026. It aims to simplify tax laws by cutting down on unnecessary provisions and outdated language. While it does not introduce any new tax rates, it significantly streamlines the legal framework, reducing the number of sections from 819 in the 1961 Act to 536 and the number of chapters from 47 to 23.

The legislation has also been made much leaner; the word count has been reduced from 5.12 lakh to 2.6 lakh, and clarity has been improved through the introduction of 39 tables and 40 formulas in place of dense, text-heavy provisions.