India's official fact-checking unit has moved swiftly to counter a piece of misinformation spreading rapidly on social media platforms. The Press Information Bureau's (PIB) Fact Check unit, on January 1, categorically denied claims that the government has imposed a steep 85% tax on bank transactions exceeding ₹10 lakh.
What Did the Viral Video Claim?
A video clip, shared by an Instagram account named 'Manjju Choudhary', made a sensational and false allegation. It claimed that once any bank transaction crosses the ₹10 lakh threshold, the government demands an 85% tax on the amount. The misleading video further alleged that the authorities do not differentiate between legitimate and illegitimate funds, taxing all such high-value transactions indiscriminately.
The PIB Fact Check unit issued a clear and firm rebuttal to this claim. It emphasized a fundamental principle of taxation: income tax is levied only on income, not on transactions. The agency clarified that there is absolutely no provision within the existing Income Tax Act that allows for imposing any kind of tax specifically on bank transactions over ₹10 lakh. This viral claim, therefore, has no basis in law or policy.
Major Tax Reforms on the Horizon: The New Income Tax Act 2025
While debunking the false news, it is important to note that India's tax system is indeed poised for a significant, but very different, transformation. From April 1, 2026, the government will implement the new Income Tax Act 2025, which will replace the decades-old Income Tax Act of 1961.
The primary objective of this new legislation is to simplify the complex web of tax rules. The government aims to make the law easier for both individuals and businesses to understand and comply with, thereby reducing unnecessary disputes and litigation. While the core structure of taxation will remain, the language and procedures are set to be streamlined for greater clarity.
Key Features of the Upcoming Tax Regime
The new tax regime, which will continue the relief announced in the 2025 Budget, introduces several taxpayer-friendly measures. A major highlight is that individuals with an annual income of up to ₹12 lakh will not have to pay any income tax.
This new system will operate on a simplified structure without the traditional exemptions and deductions. In their place, it offers lower tax slab rates:
- Income between ₹4 lakh and ₹8 lakh will be taxed at 5%.
- Earnings above ₹24 lakh will attract the highest rate of 30%.
The government expects these comprehensive reforms to boost taxpayer confidence, ensure smoother compliance, and foster a more transparent and user-friendly tax ecosystem. The move from the PIB Fact Check unit to promptly address the viral misinformation underscores the importance of relying on official sources for critical financial and policy-related information.
