Taxation Reforms are one of the key reforms to realize the vision of Viksit Bharat. In the words of the Hon’ble FM, the comprehensive review of the Income Tax Act, 1961, was completed in record time and the new Income Tax Act, 2025 shall come into effect from April 1, 2026. Further, simplified income tax rules and forms will be notified which will give adequate time to the taxpayers to acquaint themselves with its requirements. The new forms have been redesigned such that ordinary citizens can comply with the same without facing much difficulty.
Under the guidance of Prime Minister Shri Narendra Modi, the Government has taken steps to understand the needs voiced by the people. The direct tax proposals include proposals towards providing ease of living, rationalisation of penalty and prosecution provisions, providing of benefits to cooperatives, supporting IT Sector as India’s Growth Engine, attracting global business and investment into India and improvisation of tax administration.
The provisions of Finance Bill, 2026 (hereafter referred to as ‘the Finance Bill’), relating to direct taxes seek to amend the Income-tax Act, 1961 (hereafter referred to as ‘the Income Tax Act 1961‘) and the Income-tax Act, 2025 (hereafter referred to as ‘the Income Tax Act 2025’), to continue reforms in direct tax system through tax reliefs, removing difficulties faced by taxpayers and rationalisation of various provisions.
With a view to achieving the above, the various proposals for amendments are organized under the focused heads:—
- Rates of tax for financial year 2026-2027
- Ease of Living
- Rationalizing Penalty and Prosecution
- Benefits to Cooperatives
- Supporting IT Sector as India’s Growth Engine
- Attracting Global Business and Investment
- Rationalisation of Corporate Tax Regime
- Rationalisation of other direct tax provisions
This document summarises the changes made/proposed under the Income Tax Law – Section wise in a comparative manner for easy digest.
The Complete PDF document can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/02/Changes-under-Income-Tax-Law_2026-27_A2Z-Taxcorp-LLP_CA-Bimal-Jain_01.02.2025.pdf
