What’s inside:
The Indian government is introducing a new Income Tax Act from April 1, 2026, replacing the old one from 1961. The new law aims to simplify the tax system for the common people.
The new Income Tax Act 2025 will bring relief to jobholders and the middle class. Those earning up to ₹12 lakh annually will not have to pay any income tax. The government wants people to file their taxes easily and correctly without pressure.
The biggest change is the elimination of complex terms like ‘Assessment Year’ and ‘Previous Year’, which will now simply be referred to as ‘Tax Year’. This will reduce confusion while filing taxes and make the system easier to understand for the general public.
In the new tax system, if your annual income is up to ₹12 lakh, you won’t have to pay any tax. For those earning more, taxes will gradually increase, with a 30% tax on income above ₹24 lakh. Cigarettes and pan masala will also become more expensive due to increased taxes.
The GST rates will remain stable in 2026, with most goods and services falling under 5% or 18% GST. Expensive and harmful items will face higher taxes. The focus will now shift to customs duty, making import-export processes easier and cheaper.
Customs procedures will also become digital, reducing delays and paperwork. The aim is to make the customs process faster and more transparent for businesses and individuals.