India's Income Tax Act of 1961 will be replaced by the new Income Tax Act, 2025, effective April 1, 2026. The updated legislation aims to simplify tax rules and procedures for individuals and businesses, reducing disputes. Under the new regime, income up to Rs 12 lakhs will be tax-exempt. Additionally, excise duty on cigarettes and a new cess on pan masala are planned for 2026 to boost government revenue.