The Central Board of Direct Taxes is planning to launch an artificial intelligence chatbot called kar SAATHI which will address taxpayer's queries, Ravi Agarwal, Chairman of the tax body announced.
While addressing a press conference on Friday, the Chairman added that such services will also be made available offline. Further, Agarwal informed that the total number of forms under the new Income Tax Act 2025 has been reduced from 396 to 190.
"Effort is to ensure that transition to new Act is smooth," the Chairman remarked. He emphasised that reforms must be understood before they are "fully embraced."
To ensure that this happens, nationwide awareness campaigns under Prarambh being rolled out for better understanding of the new act, he stated.
Finance Minister Nirmala Sitharaman speaking at the same briefing also pointed out that sections have been reduced from 819 to 536, chapters are down to 23 from 47 earlier, and words have also been reduced to 2.6 lakh from 5.12 lakh.
The Centre has released the Income Tax Rules, 2026, giving clarity on tax provisions that will apply from April 1. These rules support the new Income‑tax Act, 2025, which comes into force for the financial year 2026‑27. Taxpayers will need to follow these rules when they file their returns by July 31.
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Here is an overview of the new IT Act:
The Income-tax Rules, 2026 will operationalise the simplified direct tax legislation that was approved by Parliament last year. The Parliament on August 12, 2025 passed a new Income Tax Bill to replace the six-decade-old Income Tax Act, 1961. It does not impose any new tax rate and only simplified the language, which was required for understanding the complex Income Tax laws.
The new Act aims to simplify the existing tax structures. Primarily, the Act simplifies tax terminology by replacing the previously used and often confusing terms ‘Assessment Year' and ‘Previous Year' with a single, unified concept called the ‘Tax Year'. Tax year been defined as the twelve-month period of the financial year commencing on the 1st April.
Moreover, it has reduced the number of Sections from the earlier 819 to 536 and the number of chapters from 47 to 23. New rules create stricter regulations around capital gains, stock exchange dealings and non-resident taxation while simplifying other disclosure mechanisms.
The Act also authorises the Central Government to design new schemes, and brings together multiple provisions for more clarity, for instance, the provisions related to Tax Deducted at Source (TDS), which were earlier distributed across multiple sections, have now been streamlined and grouped under a single section - Section 393.
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