Budget 2026: New Income Tax Act Replaces 60-Year-Old Law, Simplifies System

• The Union Budget 2026-27 introduces the new Income Tax Act, 2025, replacing the 60-year-old 1961 Act, effective April 1.
• The new law aims to simplify the tax system by reducing sections and language by 50%, removing ambiguous rules, and redesigning ITR forms for easier filing.
• The Budget distinguishes between under-reporting (50% penalty for error) and deliberate misreporting (up to 200% penalty for evasion), aiming to protect honest taxpayers.
• Key reliefs include extended deadlines for revised ITRs (to March 31), ability to claim TDS refunds even with late ITRs, and no interest on penalties during appeal processes.
• Other changes include a 6-month window for disclosing foreign assets, MAT rate reduction from 15% to 14%, and increased STT on futures and options for investors.