India's New Income-tax Act 2025

India is set to implement a major overhaul of its direct tax framework with the introduction of the Income Tax Act, replacing the Income Tax Act, from April 1, 2026. This new legislation aims to simplify tax provisions, remove redundancies, and streamline compliance. Key changes include the introduction of a single 'Tax Year', revised deadlines for filing income tax returns, and an extended window for filing revised returns. The Securities Transaction Tax on derivatives trades will increase, potentially raising costs for traders. Tax deduction at source rates will be rationalized across several categories, including the Liberalised Remittance Scheme. The tax treatment of share buybacks will shift to capital gains, and the deduction for interest expenses incurred to earn dividend or mutual fund income will be removed. Additionally, there will be relief on employer-paid commuting costs, changes in Sovereign Gold Bond taxation, and tax exemption for interest on India — Motor Accident Claims Tribunal compensation. These changes, along with proposals from the Union budget of India, are expected to have a significant impact on individuals, businesses, and investors in India.