India has overhauled its tax regime in 2025, introducing significant cuts to Goods and Services Tax (GST) rates and raising the income tax exemption limit. A new Income Tax Act is set to take effect from April 1, 2025, replacing the previous one. The reforms aim to stimulate domestic demand amidst a challenging global economy by simplifying the GST structure into two principal rates and reducing the tax burden on common items. Future focus includes customs duty rationalisation and procedural simplification.