Taxpayers can expect a change in the way they file their income tax returns in the coming years. The government has confirmed that new Income Tax Return (ITR) forms under the Income Tax Act, 2025 will be notified well before the start of the 2027–28 financial year. This means the redesigned forms will apply to income earned during the 2026–27 financial year, giving taxpayers and professionals enough time to understand and prepare for the new system. The information was shared by Minister of State for Finance Pankaj Chaudhary in a written reply in the Lok Sabha.
CBDT Consults Experts to Make ITR Filing Easier
The Central Board of Direct Taxes (CBDT) is holding detailed talks with tax experts, industry representatives and income tax officials nationwide to revamp the ITR forms. The goal is to make the forms more simple, clear and easy for taxpayers to understand. Efforts are being made to cut down unnecessary complications and present information in a more logical way, making the filing process smoother and more user-friendly.
Income Tax Act, 2025 to Replace 60-Year-Old Law
The Income Tax Act, 2025 was passed by Parliament on August 21 this year and will replace the Income Tax Act of 1961, which has been in force for over six decades. The new law will come into effect from April 1, 2026. The government says the updated Act uses simpler language, is shorter in length, and is designed to make tax compliance smoother and more transparent for both individuals and businesses.
New ITR and TDS Forms to Be Rolled Out in Phases
As part of the shift to the new Income Tax Act, all tax-related forms including quarterly TDS returns and ITR forms are being redesigned. The Directorate of Systems is working closely with the tax policy division to ensure the new formats are more logical, intuitive and taxpayer-friendly. Minister of State for Finance Pankaj Chaudhary said the updated ITR forms will also factor in changes that may be announced in Budget 2026. Because of this, the first set of ITRs under the new format for the 2026–27 tax year will be notified before the start of the 2027–28 financial year.
Old Tax Rules to Continue for Now
For the current financial year, taxpayers will continue to file returns under the existing Income Tax Act, 1961. The minister clarified that work is already in progress to streamline and simplify ITR forms for income earned in FY 2025–26 (Assessment Year 2026–27), and these will be notified under the current law. The larger revamp of India’s income tax system, however, is being seen as one of the biggest legal changes in decades, with the government highlighting the new Act as a step towards clearer rules, easier compliance and a more modern tax administration system.
