In a significant announcement for Indian taxpayers, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal has revealed the government's timeline for implementing the simplified Income Tax Act, 2025. The new income tax return forms and accompanying rules will be officially notified by January 2026, providing taxpayers with sufficient preparation time before the new law takes effect on April 1, 2026.
Simplified Forms for Easier Compliance
Speaking at the inauguration of a taxpayers' lounge during the India International Trade Fair, Agrawal emphasized the department's commitment to keeping the new forms "simple" to facilitate easier compliance as the country transitions away from the 1961 Act. This move aims to reduce the compliance burden on individuals and businesses navigating the new tax landscape.
Direct Tax Collection Targets on Track
The CBDT chairman confidently reiterated that the department will achieve its budgeted direct tax collection targets for the current financial year. The direct tax target for 2025-26 stands at Rs 25.20 lakh crore, and Agrawal expressed optimism about meeting this goal despite current challenges.
Agrawal acknowledged delays in processing tax refunds, attributing them primarily to two factors: high-value transactions flagged by the system and cases where discrepancies have been detected between filed returns and available information. "We have written to taxpayers to file a revised return in case there is a discrepancy," he stated, explaining that refunds are undergoing necessary scrutiny before release to prevent incorrect payments.
Collection Expected to Bounce Back by December
The tax collection landscape shows promising signs of improvement, according to the CBDT chief. "The collection is expected to bounce by December and there is no reason to believe that targets will not be met. Hopefully by December 10, income tax collection should increase," Agrawal projected during his address.
Current statistics support this optimistic outlook. Net direct tax collection has already grown 6.99% year-on-year to more than Rs 12.92 lakh crore until November 10. Meanwhile, refunds during the same period have seen an 18% reduction to around Rs 2.42 lakh crore, indicating tighter scrutiny and processing.
Agrawal provided reassurance about pending refunds, stating, "We have analysed and found that some wrong refunds or deductions were being claimed, so there is scrutiny, but we hope to release the remaining refunds by this month or December." This balanced approach aims to protect revenue while ensuring genuine taxpayers receive their due refunds promptly.
