Is the new Income Tax law more accessible? Explained

New Income Tax law:  The Government of India has completely revamped the income tax rules. This is the first time since independence that such a major tax reform has taken place. The old income tax law running since 1961 has now been removed. In its place, the Income Tax Act, 2025 will now be implemented. The President has also approved this law on 21 August 2025. This new law will come into effect from April 1, 2026.

The tax rates have not changed in this, but the entire system has now been made straightforward, clear and understandable. Now even the common man will be able to understand the tax rules, and companies will also get relief from the confusion of documents.

Old law was very bulky

The 1961 law was very big and complicated. It had more than five lakh words, 819 different sections and 47 chapters. Meanwhile all these have been reduced in the new tax law. Now the new tax law contains only two and a half lakh words, and the sections have been reduced to 536 and the chapters are only 23. Now more tables and formulas have been given for calculations related to tax, which has made it very easy to read and understand the rules. Another big change is that now confusing words like assessment year and previous year have been eliminated. Now everyone will adopt the same method in the name of tax year, that is, only the year from April to March will be considered according to tax.

TDS rules will now be straight

The rules of TDS (tax deduction) and TCS (tax collection) were spread across 71 different sections in the old law. Now these have been combined into just 11 sections. Now who has to deduct how much tax, on which income tax will be levied, who will get exemption, all this is clearly written in one place. This will not only benefit the common man, but companies will also find it easier to prepare reports. Now the scope of any mistake will be reduced.

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Employees will get relief

In the new law, common working people have also been given relief. Earlier, if the company provided you a vehicle to commute to and from the office, then only it was considered tax free. Now if the company bears the cost of your travel by taxi, bus or any other means, then that too will be out of tax. This is a good step according to today's working life. Also, another big change is that now not only gold, silver, cash or valuables, but digital assets like bitcoin or any such thing that can earn money in the future, will also be looked at from the tax point of view. That is, now the definition of unknown property has also changed.

Tax officers will keep a close watch

Earlier, when tax officers used to raid, they could only check the papers and property kept in the house, shop or office. But now the law has changed. Now tax officers will be able to see digital documents as well. Be it your email, mobile, laptop, online trading account, even social media, everything has now come under the scope of investigation. The purpose of this is to catch those who are hiding their income. Now officers will be able to take action not only on your total income, but also on your hidden income.

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Time to correct the mistake has also been reduced

Till now, if someone has made a mistake related to TDS, then he used to get six years to correct it. Now this time has been reduced to two years. Apart from this, now certificates for less or zero TDS can be obtained on more types of income. Till now this was available only on some things like rent, interest, commission, but now this facility will be available in many new cases as well. This will facilitate the business people in the transaction of money.

Now rules will strict for foreign companies

For foreign or associated companies, which earlier used to show their income here and there to save tax, now the rules have been tightened for them as well. Now if there is more than 26% stake in a company or if the management, money or control of a company is in the hands of another company, then it will be considered an associated company (Associated Enterprise). Earlier it was necessary to fulfill both these conditions simultaneously, but now even one is enough. This will strengthen the government's hand in matters like transfer pricing.