Global Daily Tax News, Indian Lower House Approves New Income Tax Law, (Aug 14, 2025)

India's lower house of parliament, the Lok Sabha, has approved a new income tax law to replace the Income-tax Act, 1961.

The new Income-tax (No. 2) Bill, 2025, is intended to substantially simplify and modernize India's income tax law. The law's provisions will generally become effective from April 1, 2026, reducing compliance burdens for taxpayers, including by eliminating obsolete rules and streamlining tax processes.

The new law spans a total of 536 sections, rather than the existing 819 sections in the 1961 law.

Alongside the introduction of the new law, India is expected to replace the income tax forms required from taxpayers.

Ahead of the vote by lawmakers, the Government withdrew an earlier iteration of the legislation to reflect recommendations from committees and stakeholders.