Chief Commissioner of Income Tax (IT & TP) Nirupama Kotru on Friday said the government's newly implemented Income Tax Act 2025 has made India's tax system simpler, easier to understand, and more taxpayer-friendly. Speaking at an awareness programme in Mumbai, she said the reforms are designed to help ordinary citizens file returns without confusion and reduce dependence on tax professionals for basic compliance.

What the New Law Changes

Kotru emphasised that the overarching aim of the Income Tax Act 2025 and the accompanying Income Tax Rules 2026 is to simplify compliance so that taxpayers can independently file their returns. "The main objective behind the new Income-Tax Act 2025 and Income Tax Rules 2026 is to simplify tax compliance so that ordinary taxpayers can easily understand and file taxes without confusion," she said.

She added that the government has simplified terminology, reduced the number of sections, and introduced multilingual brochures. New digital tools such as the 'Aaykar Sathi' chatbot and dedicated resources on the Income Tax website have also been made available, allowing taxpayers to resolve queries from home.

No Policy Shift, Low Tax Rates Maintained

Kotru was clear that the new legislation does not represent a change in tax policy. "There has been no change in policy and India's tax regime continues to remain taxpayer-friendly, with some of the lowest tax rates globally," she said. She credited the Finance Minister's progressive budgets over the years for sustaining a taxpayer-friendly environment in the country.

Why Many Still Find Taxes Confusing

Despite the system becoming progressively simpler, Kotru acknowledged that a widespread perception of complexity persists among ordinary citizens. Many taxpayers, she noted, still believe they need a chartered accountant to file returns and struggle to understand how different types of income are taxed. This confusion, she said, sometimes leads even honest taxpayers to make compliance errors.

Technical language and complex procedures have historically discouraged individuals from entering the formal tax system — a challenge the government is now directly addressing through the new Act's simplified drafting.

Broader Goal: Widening the Tax Base

The government's larger objective, according to Kotru, is to bring more people into the tax system. The Income Tax Act 2025 has been drafted in a more accessible format, enabling citizens to understand tax provisions independently and file returns without professional assistance. This is seen as a critical step toward expanding India's taxpayer base, which remains relatively narrow given the country's population.

With the new rules set to govern the upcoming filing season, the effectiveness of these simplification measures will be closely watched by both tax administrators and the millions of first-time filers they aim to reach.