Lok Sabha Passes S.I.M.P.L.E Income Tax Bill to Replace 1961 Law from April 2026

The Lok Sabha has passed the Income Tax (No. 2) Bill, replacing the 1961 Act from April 1, 2026, to make tax laws simpler, streamlined, Integrated, minimise litigation, Practical, Learnable, and Efficient.

Based on 285 accepted committee suggestions, it reduces the number of sections from 819 to 536 and chapters from 47 to 23.

Key reforms include simplified language, faceless digital assessments, refunds for late ITRs, no penalty for late TDS, NIL-TDS certificates, explicit deductions for commuted pension, and reinstated inter-corporate dividend relief under Section 80M.

The amendments also align tax treatment across pension schemes like UPS and NPS. Tax slabs remain unchanged. The Taxation Laws (Amendment) Bill, 2025, was also passed.