New Income Tax Act 2025: From April 1, India has moved to a new tax regime with the Income Tax Act, 2025 replacing the 1961 law. The idea behind the overhaul is straightforward. Make compliance easier, cut down confusion and bring more clarity to the system.
The structure itself has been trimmed. Sections have come down from 819 to 536. Rules have been reduced from 511 to 333. The number of forms has almost halved to 190 from 390 earlier.
One form replaces 15G and 15H
For most individual taxpayers, the biggest change will be the end of the 15G versus 15H confusion.
Earlier, people had to pick the right form based on age. Those below 60 years used Form 15G. Senior citizens filed Form 15H. Both were used to declare that income was below the taxable limit so that TDS would not be deducted.
That distinction is now gone. A single Form 121 replaces both. It can be used by eligible resident individuals across age groups, along with HUFs and some other entities. Companies, firms and non-residents are not included.
The process is also less tedious now. Instead of submitting forms separately to banks, mutual funds or other institutions, one form will work across accounts. A single identification number will track it, which should reduce the chances of excess TDS due to missed filings.
Form 26AS gets a wider role
Another change is the renaming of Form 26AS to Form 168. But this is not just a change in number.
Earlier, the form mainly showed tax credits such as TDS deducted by employers or banks. Now, it pulls in more information. It combines tax data with the Annual Information Statement and reflects a wider set of financial transactions.
This can include salary, rent, stock market activity and even large spends. In simple terms, it gives a more complete picture of a taxpayer’s financial year.
Some relief on foreign spending
There is also a small but important change for those sending money abroad.
Under the Liberalised Remittance Scheme, TCS on education and medical expenses above Rs 10 lakh has been reduced to 2 per cent from 5 per cent. The same rate applies to overseas tour packages beyond this limit.
This should lower the upfront tax outgo for families paying for education or travel overseas.
A window to fix past gaps
The new law also brings in the FAST-DS 2026 scheme. This is a limited window that allows individuals to disclose foreign assets or income that may not have been reported earlier.
It is aimed at smaller taxpayers, including students and professionals, who may have missed disclosures. The scheme offers a chance to correct this by paying a lower tax or a fixed fee in some cases. It also helps avoid stricter penalties.
Simpler on paper, tighter in practice
The broader direction is clear. Fewer forms and simpler processes on one side. Better tracking and more data visibility on the other.
For taxpayers, it should mean less paperwork. But it also means that more financial details are now visible in one place. How smoothly this works in practice will become clearer over the next few filing cycles.
