'New I-T Act Will Be Prospective In Nature'

'...so cases that arose under the existing Act will be adjudicated under the old provisions.'
'Care has been taken to ensure that the new I-T Act does not give rise to interpretational issues.'

The new rules and forms under the Income-Tax (I-T) Act, 2025, are expected to be released by the end of the year, Ramesh Narain Parbat, member (legislation), Central Board of Direct Taxes (CBDT), said in an interaction with Monika Yadav/Business Standard.

Efforts are being made to simplify the language and make it more user-friendly for taxpayers, professionals, and officers of the department, he added.

The draft rules and forms will be placed before Parliament after the necessary approvals.

Parbat also confirmed that the government is on track to implement the new Act from April 1, 2026.

What is the government's approach to drafting the new rules and forms under the I-T Act, and when can we expect them to be finalised?

When the new law was introduced in Parliament on February 13, the government also set up a committee to draft the accompanying rules and forms.

The committee has since received thousands of suggestions from states and professional bodies, and identified several redundant rules and forms that may no longer be required.

The Tax Policy and Legislation division of CBDT is now reviewing the draft recommended by the committee.

Once finalised, the draft will be cleared by the finance minister and placed before Parliament.

Efforts are being made to simplify the language and make these rules and forms (including online forms) more user-friendly.

The draft is expected to be ready by the end of the year, after which it will be placed before Parliament for approval and notification.

Since the Section numbers have been restructured in the new I-T Act, will the government issue any guidance or concordance note to help taxpayers and professionals navigate the changes?

Yes. We will issue an information guide mapping the old provisions to the new ones.

This will allow those familiar with the existing Act to easily identify the corresponding Sections under the new law.

Our officers are also being trained in the new provisions to ensure smooth implementation.

Earlier frequently asked questions on key issues will be consolidated and updated in line with the new Act, giving taxpayers, professionals, and officers a single comprehensive reference.

To what extent will judicial precedents under the current I-T Act remain applicable under the proposed new Act?

While the language has been revised, the intent of the law remains unchanged.

Care has been taken to ensure that the new I-T Act does not give rise to interpretational issues.

How will the ongoing legal disputes be dealt with under the proposed law? Will they shift to the new provisions?

For ongoing disputes, the old provisions will continue to apply.

The new I-T Act will be prospective in nature, so cases that arose under the existing Act will be adjudicated under the old provisions.

Under the transfer pricing provisions, the definition of 'associated enterprise' has been revised in the new Act. What was the rationale behind this change?

The definition of 'associated enterprise' has been revised to bring more certainty and remove ambiguity, so that no fresh tax litigation arises.

The Select Committee discussed this in detail and provided its own draft. We have made only minor changes to that.

The committee's recommendations on the Section related to 'associated enterprises' under transfer pricing provisions have been incorporated into the new Act. The definition is now simpler.

Is there any scope for further changes in the new Act?

It is a dynamic Act. Changes must be made in line with evolving political and economic circumstances. Such changes will be introduced through the Finance Act.

Feature Presentation: Rajesh Alva/Rediff