The Income Tax Department has been asked to prepare for a major legislative shift starting next financial year.
Central Board of Direct Taxes chairman Ravi Agrawal has urged tax officials to be fully prepared for the transition to the new Income Tax Act, which comes into force on April 01, 2026. The new law will replace the Income Tax Act of 1961, which has governed taxation for more than 60 years.
In his New Year message to department staff, Agrawal said new rules, procedures, and forms are being developed to support the change. He described 2026 as a year of special importance and stressed the need for readiness, training, and a clear understanding of the new framework.
“This year carries special significance. With the Income Tax Act 2025 notified and scheduled to take effect on 1 April, 2026, we prepare for the shift to the Income Tax Act 2025. New rules, procedures and forms are under formulation and training and capacity building are already underway,” he wrote.
He added that officials would need active involvement in training and familiarisation to guide taxpayers clearly. “Your involvement and curiosity will shape how smoothly we make transition,” he said.
Agrawal noted that tax administration is evolving beyond revenue collection and enforcement. “Beyond collection and enforcement, the role of the department is increasingly centred on facilitation, trust and service. Technology will be central as systems evolve to align with the new framework,” he said.
He highlighted the importance of data platforms and automated systems, especially for younger officers who will lead the department in the future. Reflecting on 2025, he praised officials for handling grievances, rectifications, and pending appeals under demanding timelines.
He also called for stronger behavioural administration using the NUDGE framework to promote voluntary compliance through better data use. “As 2026 unfolds, may we work together with diligence, clarity, and purpose,” he added.
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