Act Explained
Income Tax Act 2025 Explained
The Income Tax Act 2025 is the law that decides how much income tax you pay in India. Here is how the new Act works, what the new regime means, and where the rules and forms live — in plain English.
Introduction
The Income Tax Act 2025 is the law that decides how much income tax you pay in India. It came into force on 1 April 2026 for tax year 2026-27. The words are simpler, the structure is clearer, and the new tax regime is the default. Everything below is verified against the Income Tax Department's own guidance at incometax.gov.in.
Key facts
In force since 1 April 2026
The Income Tax Act 2025 applies from tax year 2026-27 onwards. It replaced the previous income tax law on 1 April 2026.
536 sections, 16 schedules
The new Act has 536 sections and 16 schedules. It is written in plainer words than before, making it easier to read and understand.
New regime is the default
Section 202 of the new Act makes the new tax regime the default for all taxpayers. An opt-out option is available for those who prefer the old regime.
One word: tax year
The new Act uses 'tax year' for the 12 months your income is counted over. One clear name replaces the older two-term wording.
Go deeper
Sources
- Income Tax Act 2025 at incometax.gov.in
- Income Tax Department, Objective and scope of the New Act (verified 2026-10-07)
Last reviewed by FinWiz24 Research Desk.