The Income Tax Department is gearing up for a major compliance shift as it prepares to notify brand-new Income Tax Return (ITR) forms and corresponding rules under the simplified Income Tax Act, 2025. According to Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal, the new forms will be officially notified by January 2026, allowing taxpayers, businesses, and tax professionals adequate time to transition smoothly before the new regime takes effect on April 1, 2026.

This marks a significant milestone in India’s taxation landscape. The revised provisions will replace the existing Income Tax Act of 1961, a law that has been in place for nearly six decades. The overhaul aims to make tax compliance simpler, clearer, and more aligned with modern digital systems, as highlighted in the PTI report.

Agrawal emphasized that the central focus of the new framework is simplicity and ease of compliance. The department is restructuring the ITR forms to eliminate complex language, reduce compliance friction, and ensure that even individuals with minimal tax knowledge can file returns with greater ease under the new Act.

“We are in the process of designing the new forms and rules, and our aim is to notify them by January so that taxpayers have adequate time to adjust their systems and processes,”
— Ravi Agrawal, CBDT Chairman, speaking at the inauguration of the Taxpayers’ Lounge at the India International Trade Fair (IITF), New Delhi.

This advance notification period is crucial. Tax software providers, accounting firms, payroll teams, and enterprises will need to update their systems, realign reporting formats, and train their staff well before the new rules come into force in April 2026. By providing early clarity, the Income Tax Department aims to prevent last-minute confusion and ensure a seamless transition.

The new ITR forms will be aligned with the structure of the Income Tax Act, 2025, which introduces a streamlined design, fewer sections, simplified provisions, and a reduction in redundant clauses. The forms are expected to be more intuitive, featuring modern layouts and clearer instructions reflecting the government’s intention to shift towards a taxpayer-friendly, technology-driven compliance environment.

The Taxpayers' Lounge, inaugurated by CBDT Chairman Ravi Agrawal, has been conceptualized to make tax-related services more accessible and easier to comprehend for visitors. The lounge offers a range of facilitation services and interactive tools that help demystify the system by making the experience less intimidating for the taxpayer.

Key services provided at the Taxpayers' Lounge include:

1.     Assistance in applying for PAN/e-PAN, linking Aadhaar with PAN, and resolving PAN-related issues.

2.     E-filing support, access to Form 26AS, explanation of TDS, and troubleshooting for online filing.

3.     International taxation guidance

4.     To assist in faceless assessment and appeals, thereby making the taxpayer aware of what is happening through digital procedures.

5.     Details about different taxpayer-centric initiatives, including e-Nivaran grievance redressal system.

Why Simplified Rules and Clearer Forms Are Essential Under the New Tax Regime

Expert tax consultants also point out that effective implementation of and compliance with the income-tax framework rests on Rules, Forms, and IT systems. In this context, the present set of Rules is cast in traditional legalese, which makes it difficult for a taxpayer to read and understand the intent of the provisions correctly.

Just as the new Income-tax Act 2025 reduces complexity by word count reduction and inclusions of tables and formulas, so too the revised Rules, according to experts, use simplified language, elimination of obsolete clauses, and addition of practical examples or illustrations. This is all the more necessary in Valuation Rules, where illustrations can enable the taxpayer to apply the appropriate valuation method for varying circumstances rather than wading through a sea of legalese.

According to experts, the TDS structure has been completely revamped in the new Act by classifying rules related to payments to residents, non-residents, and cases where no TDS is payable. Also, the new ITR Forms and compliance documents related thereto should be aligned with this revised framework so that TDS compliance becomes easier and more instinctive for taxpayers.

Update on Income Tax Refund Delays

Agrawal also spoke about the current issue of delayed income tax refunds. He added that the pending refunds are expected to be cleared by December.

According to him, the processing of refunds slowed down because several cases reflected incorrect deduction claims or inconsistencies, which needed further scrutiny. However, he said that the remaining refunds are expected to be released within this month or by December.

As this is one of India’s most significant tax reforms in recent decades, taxpayers can expect more predictable compliance, improved digital processing, and reduced ambiguity in interpreting tax rules. Over the coming months, detailed guidelines and explanatory notes will likely be issued to support the transition.

How long after filing ITR does one normally receive their income tax refund?

Your refund is processed only after your Income Tax Return is successfully e-verified. Usually, the refund gets credited to your bank account within 4–5 weeks of filing the return.

·        If you do not get the refund in this duration, it is better to:

• ·        Check for any errors or mismatch in the filed ITR.
• ·        Review any intimations or notices issued by the Income Tax Department
• The refund status should be tracked on the Income Tax e-filing portal for identification of the problem.

Simplified Forms to Ease Compliance for Taxpayers

Officials have indeed confirmed that all forms under the Income Tax Act—TDS quarterly return forms, ITR forms, and compliance-related formats are under a complete makeover. The goal is to make them more user-friendly, transparent, and easier to understand for taxpayers across all categories.

The Directorate of Systems is working in close coordination with the tax policy division to redesign these forms with clearer instructions, streamlined layouts, and simplified language. Once the revised formats are finalized, they will be vetted by the law department before being officially notified and placed before Parliament for approval.

This initiative is expected to significantly reduce compliance burden and eliminate confusion, especially for individual taxpayers, small businesses, and accounting professionals who rely on these forms for timely and accurate filings.

Conclusion

The new ITR forms and their rules, which are to be rolled out under the Income Tax Act, 2025, are definitely one of the most transformational tax reforms India has seen in decades. Moving away from the decades-old Income Tax Act of 1961 to a more streamlined, technology-driven, and simplified format, this will be a more transparent and efficient way to do compliance for the taxpayer.

Because the government decided to notify new forms by January 2026, there would be enough time for taxpayers, businesses, and compliance professionals to switch systems, upgrade software, train teams, and understand the revised requirements before the new rules come into force on April 1, 2026. Such efforts as the Taxpayers' Lounge further reinforce the commitment of the government towards improving services concerning taxpayers and spreading awareness about digital tax procedures.

The new regime is designed to eliminate ambiguity and minimize errors with the use of simpler language, reduced complexity, restructured TDS provisions, and modernized form layouts. Experts also feel that the incorporation of practical examples and illustrations in the Rules will make compliance even smoother, especially in areas like valuation and TDS classification.

As India moves to this new tax regime, it continues to place emphasis on clarity, access, and digital enablement. Indeed, over the next few months, more instructions and explanation notes will follow, truly facilitating a seamless transition for the taxpayers. On the whole, these changes foreshadow a future when compliance with taxes will be effortless, quick, and instinctive, thus ensuring a stronger, more transparent, and more taxpayer-friendly environment for years to come.

FAQ: New ITR Forms & Income Tax Act 2025 Updates

1. What has the government announced regarding the new ITR forms?

The government has confirmed that new Income Tax Return (ITR) forms and rules under the Income Tax Act, 2025 will be notified by January 2026. This gives taxpayers enough time to adjust before the new system becomes applicable from April 1, 2026.

2. Why are new ITR forms being introduced?

The new forms aim to simplify tax compliance by using clearer language, reducing complexity, removing redundant provisions, and aligning with the structure of the Income Tax Act, 2025. The goal is to make filing easier, even for individuals with minimal tax knowledge.

3. What happens after the forms are notified?

Once notified, the forms will be vetted by the law department and then tabled in Parliament. Tax professionals, businesses, and software providers will begin updating their systems and training their teams for the transition.

4. How is the new Income Tax Act, 2025 different from the previous Act of 1961?

The new Act is:

• Shorter and simpler
• Designed with clearer language
• Structured using tables and formulas
• More aligned with digital tax filing systems
• Easier to understand and navigate

It replaces a six-decade-old legislation to make compliance more modern and efficient.

5. What services are available at the new Taxpayers’ Lounge?

The Taxpayers’ Lounge offers:

• Help with PAN/e-PAN applications and Aadhaar–PAN linking
• E-filing and TDS support
• Form 26AS guidance
• Assistance with faceless assessments and appeals
• International taxation support
• Information on grievance redressal via e-Nivaran

6. Why are some income tax refunds delayed this year?

Refunds slowed due to incorrect deduction claims and mismatches found during scrutiny. The department is reviewing these cases. Pending refunds are expected to be cleared by December.

7. How long does it usually take to receive an income tax refund?

You typically receive your refund within 4–5 weeks after your ITR is successfully e-verified. If not, you should:

• Review your filed return for errors
• Check any notices from the Income Tax Department
• Track refund status on the e-filing portal

8. How will the new rules make compliance easier for taxpayers?

The government is redesigning all tax forms to ensure:

• Clearer instructions
• Simple layouts
• Reduced legal jargon
• Practical examples in Rules
• Better alignment with revamped TDS categories

This is expected to reduce confusion and compliance burden for businesses and individuals.

9. How is the TDS structure changing under the new Act?

The TDS framework has been reorganized into categories such as:

• Payments to residents
• Payments to non-residents
• Situations where no TDS applies

The new ITR forms will reflect this structure to make compliance more intuitive.

10. Do taxpayers need to prepare for the new Act now?

Not immediately. However, taxpayers, businesses, and compliance professionals should start:

• Staying updated on notifications
• Reviewing system requirements
• Preparing for software updates
• Understanding the new structure

The transition is planned to be gradual and well-supported with guidelines.