The Union Government on Friday notified the Income Tax Act, 2025, in the Official Gazette, a day after it received the President's Assent to become a law.

According to the Gazette notification, the act will come into effect from April 12, 2026. The act, aimed to simplify income taxation in the country, has replaced the six-decade-old Income Tax Act, 1961.

In a post on X, the Income Tax India shared the Gazette notification with the caption, "The Income-tax Act, 2025 has received the Hon’ble President’s assent on 21st Aug 2025. A landmark reform replacing the 1961 Act, it ushers in a simpler, transparent & compliance-friendly direct tax regime."

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The bill was initially tabled in the Lok Sabha by Finance Minister Nirmala Sitharaman in February this year. Soon after the introduction, the bill was sent to the Select Committee. The committee, headed by BJP MP Baijayant Panda, made 285 suggestion. The Central government agreed to incorporate almost all of the suggestions.

To bring the required changes, the old draft was withdrawn and the new draft was tabled by the FM during the Monsoon Session of the Parliament. 

It was passed in both Houses and was sent to President for assent. On August 21, President Droupadi Murmu gave her assent to the bill, making it an act. The crucial bill aims to simplify the law and replacing the six-decade-old Income Tax Act, 1961. The act uses easy language and has a reduced number of sections, chapters compared to its predecessor.

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While there were 819 sections in the IT Act, 1961, the new act has 536 sections. Similarly, the number of chapters has also been reduced from 47 to 23. Moreover, the number of words has been slashed to nearly half from 5.12 lakh to 2.6 lakh. For the first time, the act introduced 39 new tables and 40 new formulas.