New simplified I-T return forms and rules under Income Tax Act, 2025, set for January release
The Income Tax Act, 2025, approved by Parliament on 12 August, represents the most comprehensive reform of India’s direct tax legislation in more than half a century.
- Nov 19, 2025,
- Updated Nov 19, 2025 9:05 PM IST
The Income Tax Department is preparing for one of the most significant overhauls in India’s direct tax compliance framework in decades, as all income tax return (ITR) forms and related compliance formats are set for a comprehensive redesign by January 2026. This sweeping revamp comes ahead of the formal rollout of the new Income Tax Act, 2025, which will replace the 64-year-old Income Tax Act of 1961. The redesigned forms aim to simplify the compliance experience for millions of taxpayers before the new financial year begins on 1 April 2026.
Central Board of Direct Taxes (CBDT) chairman Ravi Agrawal confirmed the timeline, noting that the redesign is being executed with a clear focus on ease of filing and greater clarity. Taxpayers and financial professionals will have an estimated three-month period to understand and align their processes with the new regulatory structure before the updated tax regime becomes operational.
To facilitate this transition, the Directorate of Systems is currently reworking all compliance formats, including quarterly TDS forms. This exercise is being conducted in close coordination with the tax policy division to ensure consistency in rules and reporting requirements. Once the revised forms and regulations are drafted, they will undergo legal vetting before being introduced in Parliament. The overarching goal is to make the compliance formats more intuitive, reduce procedural friction and help individuals, small businesses and professionals navigate their tax obligations seamlessly.
Speaking at the inauguration of the Taxpayers' Lounge at the India International Trade Fair in New Delhi, Agrawal emphasised the department’s user-first approach: “We are in the process of designing the new forms and rules, and our aim is to notify them by January so that taxpayers have adequate time to adjust their systems and processes.” He further reinforced the department’s objective: “Our focus is on keeping the new return forms simple and easy to comply with, so taxpayers can adapt without any difficulty under the revised Tax Act.”
The Income Tax Act, 2025, approved by Parliament on 12 August, represents the most comprehensive reform of India’s direct tax legislation in more than half a century. While the Act retains existing tax rates, it introduces sweeping structural changes aimed at modernising the law, making it more readable and eliminating obsolete provisions that have accumulated over the decades.
The redesign is underpinned by significant quantitative changes. The number of sections in the Act has been reduced from 819 to 536, and the number of chapters has been cut from 47 to 23. The entire text has been streamlined from approximately 512,000 words to 260,000 words. Additionally, 39 tables and 40 formulas have been introduced to replace dense legal language, making tax calculations clearer and ensuring greater transparency for taxpayers.
For the average taxpayer, these reforms are expected to result in a smoother filing experience, fewer ambiguities in interpretation and a more predictable compliance environment. Industry experts note that the early notification of forms in January will give tax professionals, corporates and financial advisors sufficient time to recalibrate internal systems and prepare for the transition.
Although the new law does not alter tax rates, it promises a cleaner, simplified and future-ready framework. As India prepares for its first major direct tax code overhaul in more than 60 years, the government is urging stakeholders to begin early preparations to ensure a seamless shift to the redesigned tax compliance landscape.
The Income Tax Department is preparing for one of the most significant overhauls in India’s direct tax compliance framework in decades, as all income tax return (ITR) forms and related compliance formats are set for a comprehensive redesign by January 2026. This sweeping revamp comes ahead of the formal rollout of the new Income Tax Act, 2025, which will replace the 64-year-old Income Tax Act of 1961. The redesigned forms aim to simplify the compliance experience for millions of taxpayers before the new financial year begins on 1 April 2026.
Central Board of Direct Taxes (CBDT) chairman Ravi Agrawal confirmed the timeline, noting that the redesign is being executed with a clear focus on ease of filing and greater clarity. Taxpayers and financial professionals will have an estimated three-month period to understand and align their processes with the new regulatory structure before the updated tax regime becomes operational.
To facilitate this transition, the Directorate of Systems is currently reworking all compliance formats, including quarterly TDS forms. This exercise is being conducted in close coordination with the tax policy division to ensure consistency in rules and reporting requirements. Once the revised forms and regulations are drafted, they will undergo legal vetting before being introduced in Parliament. The overarching goal is to make the compliance formats more intuitive, reduce procedural friction and help individuals, small businesses and professionals navigate their tax obligations seamlessly.
Speaking at the inauguration of the Taxpayers' Lounge at the India International Trade Fair in New Delhi, Agrawal emphasised the department’s user-first approach: “We are in the process of designing the new forms and rules, and our aim is to notify them by January so that taxpayers have adequate time to adjust their systems and processes.” He further reinforced the department’s objective: “Our focus is on keeping the new return forms simple and easy to comply with, so taxpayers can adapt without any difficulty under the revised Tax Act.”
The Income Tax Act, 2025, approved by Parliament on 12 August, represents the most comprehensive reform of India’s direct tax legislation in more than half a century. While the Act retains existing tax rates, it introduces sweeping structural changes aimed at modernising the law, making it more readable and eliminating obsolete provisions that have accumulated over the decades.
The redesign is underpinned by significant quantitative changes. The number of sections in the Act has been reduced from 819 to 536, and the number of chapters has been cut from 47 to 23. The entire text has been streamlined from approximately 512,000 words to 260,000 words. Additionally, 39 tables and 40 formulas have been introduced to replace dense legal language, making tax calculations clearer and ensuring greater transparency for taxpayers.
For the average taxpayer, these reforms are expected to result in a smoother filing experience, fewer ambiguities in interpretation and a more predictable compliance environment. Industry experts note that the early notification of forms in January will give tax professionals, corporates and financial advisors sufficient time to recalibrate internal systems and prepare for the transition.
Although the new law does not alter tax rates, it promises a cleaner, simplified and future-ready framework. As India prepares for its first major direct tax code overhaul in more than 60 years, the government is urging stakeholders to begin early preparations to ensure a seamless shift to the redesigned tax compliance landscape.