Income Tax act 2025 will come into effect from 1st April 2026
The Income Tax Act, 2025 will come into effect from 1st April, 2026. Presenting the Union Budget in the Lok Sabha, today, the Finance Minister said, the simplified Income Tax Rules and Forms will be notified shortly, giving adequate time to taxpayers to acquaint themselves with its requirements. The forms have been redesigned such that ordinary citizens can comply without difficulty.She said, the government has extended the timeline for filing of tax returns. Individuals with ITR 1 and ITR 2 returns will continue to file return till 31st July and non-audit business cases or trusts are proposed to be allowed time till 31st August.
Finance Minister further informed the House that the fiscal deficit in financial year 2026-27 is estimated to be 4.3 percent of GDP compared to 4.4 percent in current fiscal.
The Finance Minister announced that no deduction will be allowed in respect of any interest expenditure incurred in relation to dividend income or income from units of mutual funds, and the existing provision permitting such deduction will also be omitted subject to a specified ceiling.
