Govt to Finalise All Rules Under New Income Tax Law by December 31

India is preparing for a comprehensive shift in its tax landscape, with the government set to notify all rules under the revamped income tax law by December 31, 2025, as per the Moneycontrol report. 

This marks a key milestone in transitioning towards a simplified, tech-enabled taxation regime aimed at reducing complexity for taxpayers and businesses alike.

Government Sets December 31 Deadline to Notify 400 Tax Rules

The Union government is working towards notifying all rules under the upcoming Income Tax Act by December 31, 2025. These will include approximately 400 rules and 180 forms consolidated into one notification. This is streamlined compared to the current system, which includes over 500 rules, aiming to reduce ambiguity and improve compliance efficiency.

Key Role of Rules and Forms in Income Tax Law

Rules define how major provisions in the income tax law will be implemented, such as calculating tax liabilities, applying exemptions, and processing refunds. Forms are standardised templates for businesses and individuals to share financial data, file returns, or claim deductions. Together, they create the operational foundation of the tax system.

Systems Integration to Follow Notification

After the rules are notified, the government will focus on backend integration during the fourth quarter of FY25. This includes developing utilities, creating prototypes of forms, and testing them rigorously before they are deployed. Form development will involve data integration and quality checks to ensure readiness at the time of rollout.

Read More:Income Tax Refunds Drop 16% as Filters Tighten; Direct Tax Collections Rise 2.4%!

Part of a Larger Overhaul of the Income Tax System

This change is part of the overhaul of the existing Income Tax Act, 1961. The new framework is designed to make legal interpretations simpler, reduce litigation burden, and align tax operations with contemporary economic practices and digital systems. Fewer procedures and better technology integration aim to improve the taxpayer experience.

Conclusion

The government’s move to consolidate and notify all income tax rules by December 31, 2025, reflects its commitment to simplify tax administration. With reduced forms and rules and strong digital infrastructure, the new system is expected to ease compliance burdens and enhance transparency for all stakeholders.

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