President Gives Assent to Income-tax Act, 2025
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- Last Updated on 23 August, 2025
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30 of 2025, dated 21-05-2025
1. Assent to the Income-tax Act, 2025
The President of India has given assent to the Income-tax Act, 2025, marking a historic development in the country’s direct tax framework. This legislation repeals and replaces the Income-tax Act, 1961, which has been in force for more than six decades. The enactment of this new law underscores the government’s objective of modernizing tax legislation to keep pace with evolving economic realities, global practices, and the growing complexity of business transactions.
2. Objective of the New Law
The Income-tax Act, 2025, has been enacted with the primary objective of consolidating and amending the law relating to income tax. By replacing the archaic provisions of the 1961 Act, the new legislation seeks to simplify compliance, reduce litigation, and provide greater clarity in interpretation of tax laws. It aims to create a more efficient and predictable tax regime, thereby fostering investor confidence and supporting the government’s broader goal of ease of doing business.
3. Date of Enforcement
The provisions of the new Act shall come into force from 1st April, 2026, and will apply in relation to the assessment year 2026-27 and onwards. This one-year window before implementation provides taxpayers, businesses, and professionals sufficient time to understand the new provisions and prepare for a smooth transition. It also allows the government and tax administration to issue necessary rules, notifications, and clarifications to ensure effective implementation of the new law.
4. Taxation Laws (Amendment) Act, 2025
Alongside the approval of the new Income-tax Act, the President has also given assent to the Taxation Laws (Amendment) Act, 2025. This legislation seeks to amend certain provisions of the Income-tax Act, 1961, which will continue to remain in force until the new law takes effect. These amendments are aimed at addressing immediate concerns, plugging gaps, and aligning the existing law with current requirements, thereby ensuring continuity and stability during the transition phase.
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