In an important development, CBDT Chairman Ravi Agrawal has urged the Income Tax Department to gear up for the implementation of the new direct tax law, set to take effect from April 1, 2026. Agrawal emphasized the need for tax officials to approach this transition with clarity and purpose.
In his annual communication to the department’s staff, the Chief of the Central Board of Direct Taxes (CBDT) outlined that new rules, procedures, and forms are currently being developed for a seamless shift. The upcoming Income Tax Act 2025 is poised to replace the long-standing Income Tax Act of 1961, which has been in operation for over six decades.
Significance of the Transition
Marking 2026 as a year of “special significance” for the Income Tax Department, Agrawal called for a collective readiness among officials. He highlighted the importance of understanding the new law and maintaining confidence in its implementation.
“This year carries special significance. With the Income Tax Act 2025 notified and scheduled to take effect on April 1, 2026, we prepare for the shift to the Income Tax Act 2025,” Agrawal stated in his letter.
Ongoing Initiatives for Readiness
To ensure a smooth transition, the CBDT is actively working on formulating new regulations and procedures. Additionally, training and capacity-building initiatives are already in progress to equip officials with the necessary skills and understanding.
As the Income Tax Department prepares for this transformative change, stakeholders are encouraged to stay informed about upcoming developments and ensure their readiness for the new tax framework.