The Government of India has completed a major step in overhauling direct tax legislation. The Revised Income Tax (No. 2) Bill, 2025 (Revised ITB 2025) and the Taxation Laws (Amendment) Bill, 2025 have both received Presidential Assent on 21 August 2025, making them law.
The Revised ITB 2025, which simplifies the language of the Income Tax Act, 1961 (ITA 1961) without changing its underlying policy, was introduced in the Lok Sabha on 11 August 2025 and cleared by both Houses within two days. It incorporates recommendations of the Parliamentary Select Committee as well as the provisions of the Amendment Bill. The Revised ITB 2025 will replace the ITA 1961 with effect from 1 April 2026, while the Taxation Laws (Amendment) Act, 2025 takes effect from 1 April 2025 or earlier.
Businesses will need to align systems and processes with the new law before its effective date, while continuing to engage with the government on rules, forms, and future provisions to reduce compliance challenges and potential disputes.
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