New Delhi: The government has confirmed that new income tax return (ITR) forms under the Income Tax Act, 2025 will be notified before the start of the 2027–28 financial year. This means taxpayers will begin using the redesigned ITR forms for income earned in the 2026–27 financial year. The announcement was made by Minister of State for Finance Pankaj Chaudhary in a written reply in the Lok Sabha.
Consultations Underway for Simpler Tax Forms
The Central Board of Direct Taxes (CBDT) is currently holding detailed discussions with tax experts, industry representatives and income tax officials across the country. The aim is to redesign ITR forms so that they are simpler, clearer and easier for taxpayers to understand and file. Officials are working to remove unnecessary complexity and make disclosures more logical.
New Income Tax Law to Replace Old Act
The Income Tax Act, 2025 was passed by Parliament on August 21 this year. It will replace the Income Tax Act of 1961, which has been in force for more than 60 years. The new law will come into effect from April 1, 2026. The government says the new Act reduces the length of the law, simplifies language, and makes tax compliance smoother for individuals and businesses.
ITR and TDS Forms Being Redesigned
Under the new law, all tax-related forms are being revised. This includes income tax return forms and quarterly TDS return forms. The Directorate of Systems is working closely with the tax policy division to ensure that the new forms follow a user-friendly design and match the simplified structure of the new Act.
Budget 2026 Changes to Be Included
The minister explained that the new-format ITR forms will also include changes that may be announced in Budget 2026. Because of this, the first set of ITR forms under the Income Tax Act, 2025 will be notified before the 2027–28 financial year begins.
No Change for Current Financial Year
For now, taxpayers should note that the existing Income Tax Act, 1961 will continue to apply for the current financial year. ITR forms for income earned in FY 2025–26 (Assessment Year 2026–27) will still be notified under the old law, though efforts are being made to simplify them as much as possible.
This overhaul marks one of the biggest changes to India’s tax system in decades, aimed at making taxes easier to understand and comply with.
