India will implement a new Income Tax Act, 2025, effective April 1, replacing the 1961 law. This revenue-neutral legislation aims to simplify direct tax laws, reduce ambiguity, and decrease litigation by cutting the text volume by approximately 50 percent. Key changes include a single 'tax year' framework, replacing the distinction between assessment and previous years, and allowing TDS refunds for late ITR filings without penalty. Changes announced in the 2026-27 Union Budget will be incorporated into the new Act.