RAS question
When will the new Income Tax Act 2025 come into effect?
Correct answer: (B) April 1, 2026.
The Income Tax Act, 2025 will come into effect on April 1, 2026, replacing the Income Tax Act, 1961.
Explanation
The Income Tax Act, 2025 is scheduled to be effective from April 1, 2026. The PIB note presents it as the new framework for direct taxation and states that the government reviewed the older Income-tax Act, 1961 to simplify language, reduce disputes, remove outdated provisions, and restructure the law for clearer use. This matters for the question because the effective date is not just a random commencement date; it marks the shift from the 1961 Act to a simplified framework that keeps broad tax-policy continuity while making the law easier to navigate. Among the four options, only April 1, 2026 matches the cited official source.
Why the other options are wrong
- (A) January 1, 2026 is wrong because the PIB source states that the Income Tax Act, 2025 will be effective from April 1, 2026.
- (C) July 1, 2026 is wrong because it falls after the officially stated commencement date of April 1, 2026.
- (D) October 1, 2026 is wrong because the official PIB note gives April 1, 2026 as the date from which the Act becomes effective.
Concept
This tests the Indian Economy syllabus area of taxation reforms and direct-tax administration. RAS frequently asks such commencement-date questions because they link current legislation with institutional and fiscal governance.