New Income Tax Act: New Income Tax Law to be implemented from 2026, 64-year-old rules abolished

New Income Tax Act: The biggest change is that difficult tax-related terms like ‘Assessment Year’ and ‘Previous Year’ will be eliminated. Now, only ‘Tax Year’ will be used. This will reduce confusion while filing taxes and make the entire system easier for the common man to understand.

New Income Tax Act: The central government is going to implement a new Income Tax law (New Income Tax Act 2025) in the country from April 1, 2026.  With this, the 64-year-old Income Tax Act of 1961 will be abolished. The government says that the new law will simplify the tax system so that ordinary people do not face any difficulty in understanding the rules.

This new law will provide significant relief to salaried employees and the middle class. In the new tax system, if your annual income is up to ₹12 lakh, you will not have to pay any income tax. Instead of pressuring people to pay taxes, the government wants people to file their taxes easily and correctly.

The biggest change is that difficult tax-related terms like ‘Assessment Year’ and ‘Previous Year’ will be eliminated. Now, only ‘Tax Year’ will be used. This will reduce confusion while filing taxes and make the entire system easier for the common man to understand.

No tax for those earning up to ₹12 lakh

The relief provided in the new tax system in 2025 will continue in 2026 as well. This means that if your annual income is up to ₹12 lakh, there will be no income tax. No more hassles with different exemptions and deductions. A simple and clear tax slab. For higher earners, the tax will increase gradually, and a 30% tax will be levied on income above ₹24 lakh. Cigarettes and Pan Masala will now be more expensive

The government is preparing to increase taxes on certain items, starting with cigarettes and pan masala. A new tax will be levied on these two items in addition to the existing GST. The government believes that these products are harmful to health, and therefore, increasing taxes on them will not only boost revenue but also discourage people from using them.

No major changes to GST expected

Major changes were made to GST rates in 2025, and the same system will continue in 2026. Next year, most goods and services will remain under the 5% or 18% GST bracket, while expensive and harmful goods will attract higher taxes. Overall, the government wants the GST system to remain stable so that ordinary people and businesses can conduct their operations smoothly without any confusion.

Government to focus on Customs Duty

After reforms in Income Tax and GST, the government's focus will now be on Customs Duty. Several customs tax slabs have already been reduced, and further steps are being taken to simplify the import-export process. This will make importing and exporting goods easier and potentially cheaper.

Customs will also go digital

Just as the income tax system has become online and faceless, customs will also be digitized. This will reduce delays at ports, minimize paperwork, and eliminate the need for businesses to repeatedly visit government offices. Overall, the customs process will become faster and more transparent.

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