The Lok Sabha Unstarred Question No. 3579, to be answered on Monday, August 10, 2026/Shravana 19, 1948 (Saka), on “Operationalisation of the Income Tax Act, 2025” was answered by the Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary. The Question sought details regarding preparedness for smooth implementation of the new Income-tax law, simplified rules and forms, digital taxpayer systems, outreach measures, automated processes for small taxpayers and disposal of faceless assessments and appeals.
The Government informed the Lok Sabha that the Income-tax Act, 2025 has replaced the Income-tax Act, 1961 and came into force from April 1, 2026. To facilitate its smooth operationalisation, the Income-tax Rules, 2026, replacing the Income-tax Rules, 1962, were notified on March 20, 2026 and also came into effect from April 1, 2026.
As part of the simplification exercise, the Government stated that the number of Income-tax Rules has been reduced from 511 to 333, while the number of Income-tax Forms has been brought down from 399 to 190, with the objective of easing compliance for taxpayers.
To support taxpayers in transitioning from the Income-tax Act, 1961 to the new legislation, the Income Tax Department launched a nationwide awareness and outreach campaign titled “PRARAMBH 2026” — Policy Reform and Responsible Action for Mission Viksit Bharat.
The Government also said that the digital taxpayer infrastructure has been upgraded as part of the transition. A new user-friendly Income Tax website was launched in March 2026 under the PRARAMBH 2026 initiative, while development of e-Form utilities for the newly introduced Income-tax Forms, 2026 is under progress.
Under PRARAMBH 2026, the Department conducted 304 physical outreach programmes across the country in English, Hindi and various regional languages, with participation of approximately 50,000 taxpayers and stakeholders.
The Income Tax Department also developed multilingual educational and awareness material, including 12 brochures in English and material in 11 regional languages, including Hindi, covering newly introduced forms and procedures. More than 1.75 lakh copies of brochures and other publications were distributed through field formations and Aaykar Seva Kendras (ASKs).
Digital outreach measures under the campaign include QR code-enabled brochures providing taxpayers access to explanatory digital content and Samvaad video sessions. The Department has also deployed an AI-enabled chatbot, “Kar Saathi,” to assist taxpayers in understanding provisions of the Income-tax Act, 2025.
On easing compliance for small taxpayers, the Government stated that Section 395(1) of the Income-tax Act, 2025 provides for issuance of certificates for deduction of tax at source at nil or lower rates. Through the Finance Act, 2026, an option has been enabled for a payee to electronically apply for such a certificate, which may also be issued or rejected electronically subject to prescribed conditions. The enabling rule for the process is currently under preparation and will be notified in due course.
The Government further informed the House that the number of appeals disposed of increased from 1.11 lakh in FY 2023-24 to 1.72 lakh in FY 2024-25 and 2.24 lakh in FY 2025-26.
Data on faceless assessments showed that 2.73 lakh faceless assessments were completed in FY 2023-24, 1.65 lakh in FY 2024-25 and 2.13 lakh in FY 2025-26.
The Government said it has also undertaken outreach and facilitation measures specifically aimed at helping small traders and professionals transition to the new Income-tax law and the digital compliance framework. These include the PRARAMBH 2026 campaign, multilingual awareness material, assistance through Aaykar Seva Kendras, QR-enabled educational resources, SAMVAAD videos and the Kar Saathi AI chatbot.
The Department has also introduced the “Kar Setu” booklet to explain the interplay between the earlier Income-tax Act and the new law. The Government said its outreach initiatives are being implemented across the country, including in commercial and business centres, to ensure that small traders, professionals and other categories of taxpayers receive adequate assistance in moving to the simplified law and digital compliance system.
Radhika Goyal is Author of Taxconcept Gurugram head office, for deeply reported tax, gst and income tax articles on issues that matter. He splits her time between New Delhi and Bengaluru, and has worked as a reporter, a podcaster and an editor for publications across India.