New income tax forms & Expected changes & transitional details as of Dec 2025
When the New Income-Tax Act & New Forms Will Apply :
The Income Tax Act, 2025, has been passed and will come into effect from April 1, 2026, replacing the Income Tax Act, 1961. New income-tax return forms and associated rules under the 2025 Act will be notified before FY 2027-28, i.e., well before filing for AY 2027-28 (FY 2026-27 income).
Meaning for Taxpayers: For FY 2024-25 / AY 2025-26 and FY 2025-26 / AY 2026-27, taxpayers will continue using forms prepared under the old Act (IT Act, 1961) with modifications as notified under current law. New income-tax return forms reflecting changes under the 2025 Act will start with returns for income earned during FY 2026-27 onward, to be filed in FY 2027-28.
Status of New Forms (2025 Act)
CBDT is working on a simplified set of new income-tax return forms and rules to align with the new statute. These will be notified alongside rule changes, likely by January 2026, ahead of the Act’s enforcement.
All main compliance forms, including the Annual New Income-Tax Return (ITR-1 to ITR-7), Quarterly TDS returns & Other statutory reporting schedules, are updated. The Tax Dept. has been redesigning tax forms, aiming to simplify language and structure and reduce compliance ambiguity.
Transitional Position (Current ITR Forms) : Until the new forms under the 2025 Act are notified, the current ITR forms applicable are those for AY 2025-26 and Assessment Year 2026-27 under the existing Act, with recent updates already implemented:
ITR-1 & ITR-4 Expanded Eligibility (AY 2025-26): ITR-1 (Sahaj) now allows reporting long-term capital gains up to INR 1.25 lakh (without carryforward losses). and as far as ITR-4 (Sugam), it similarly expanded to include eligible long-term capital gains under certain conditions.
Identification & Filing Process Changes: actual Aadhaar number is now mandatory for e-filing/PAN linking; moreover, the tax dept clearly updated that Aadhar enrollment IDs are no longer accepted.
Tax Dept has enhanced new income tax form features like simplified instructions & clearer field explanations, pre-validated / auto-filled data for deductions and exemptions & a clearer opt-out declaration for the New Tax Regime (Form 10-IEA) if relevant.
Practical Implications for Filers
- For FY 2024-25 & FY 2025-26 : Use existing Income-Tax Return forms under the 1961 Act even though the new Act has been passed, because notification of new forms is pending.
- In case of FY 2026-27 onwards: Updated new Income Tax Return forms under the Income Tax Act, 2025, will become applicable once officially notified, likely in early 2026.
- Major shift: The New Income-tax Act, 2025, replaces the 1961 Act. Moreover, simplified new income-tax return forms are expected by early 2026 for Assessment Year 2026-27. And more Focus on ease of compliance, digital filing, and taxpayer services. as well as likely alignment with data-driven compliance and faceless assessment.
NEW INCOME TAX RETURN FORMS
- New Income Tax Return Forms related question was raised in the Lok Sabha by members, and the corresponding answer was given by the Minister of State in the Ministry of Finance (Shri Pankaj Chaudhary). The basic key points are like the following: Questions Asked Whether the government proposes to release new income tax return forms and related rules under the simplified Income Tax Act, 2025 by January 2026. If yes, details and objectives. Whether experts and industry bodies are consulted before finalizing. If yes, details of their response. What steps to take to make ITR forms user-friendly and reduce the compliance burden. And How taxpayers will benefit in terms of filing process, assessment, and services.
- The Indian Government’s Government of India, Ministry of Finance, Department of Revenue responded with the answer that the Income-tax Act, 2025, was enacted on 21st August 2025 to replace the existing Income-tax Act, 1961. This change will come effectively from tax year 2026-27. The Income Tax Notification of Rules and Forms is in process. And simplification of ITR forms is being worked on by CBDT. Moreover, the new Income-Tax Return forms for Assessment Year 2026-27 will be notified prior to FY 2027-28. The department has extensive consultations with tax experts, institutional bodies, and field formations that are ongoing. This has more objectives to simplification and user-friendliness, reducing compliance burden. The following official documents from the Government of India, Ministry of Finance, and Department of Revenue are attached here under:
Tips to Prepare for New Forms
- Major shift: Follow CBDT updates on form notifications & rules early in 2026. New Income-tax Act, 2025 replaces the 1961 Act. Moreover, simplified new income-tax return forms are expected by early 2026 for Assessment Year 2026-27.
- Expect more simplified schedules, but also fields aligned to the new statutory framework. More Focus on ease of compliance, digital filing, and taxpayer services. as well as likely alignment with data-driven compliance and faceless assessment.
- Review your reporting processes (e.g., foreign income, digital assets, exemptions) , new forms are expected to emphasize structured disclosure. (anticipatory, based on simplification intent)
In Summary: Key Takeaways from CBDT FAQs on Income-Tax Bill 2025
- The bill primarily simplifies and reorganizes tax law without changing fundamental tax policy. Definitions and procedural concepts are clarified and consolidated. Assessment procedures and compliance timelines are redrafted for clarity. Terminological changes (e.g., unexplained credits) are explained to avoid misinterpretation. and FAQs serve as a bridge between old Act provisions and the new Bill structure, ensuring a smooth transition.
- You may also review the following blogs:
Summary Timeline Phase Applicable Forms & Law |
| Phase | Applicable Forms & Law |
| FY 2024-25 / AY 2025-26 | Current ITR forms under Income Tax Act, 1961 (updated) |
| FY 2025-26 / AY 2026-27 | Current Act forms continue (with updates) |
| FY 2026-27 / AY 2027-28 | New ITR forms under Income Tax Act, 2025 (expected notified before filing) |
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