CBDT chief urges tax officials to prepare for transition to new Income Tax Act

Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal has asked the Income Tax Department to be ready and proactive for the transition to the new direct tax law, which is scheduled to be implemented from April 1, calling on officials to work with clarity and purpose.

In his customary New Year communication to department staff, the CBDT chief said new rules, procedures and forms were being formulated to facilitate the transition. The CBDT is the administrative body for the Income Tax Department.

The new Income Tax Act will replace the existing Income Tax Act of 1961, which has been in force for over six decades.

Describing 2026 as a year of “special significance” for the department, Mr. Agrawal urged officials to ensure their “readiness, understanding of the law and shared confidence in its implementation”.

“This year carries special significance. With the Income Tax Act 2025 notified and scheduled to take effect on 1 April, 2026, we prepare for the shift to the Income Tax Act 2025. New rules, procedures and forms are under formulation and training and capacity building are already underway,” Mr. Agrawal wrote in his January 1 letter to officials.

PTI, which accessed the communication, reported that the CBDT chief said the coming months would require the “active involvement in training and familiarisation so that we understand the intent and structure of the new law and are able to guide tax payers with clarity”.

“Your involvement and curiosity will shape how smoothly we make transition,” he said.

Mr. Agrawal added that the approach to tax administration was “evolving”.

“Beyond collection [of revenue and taxes] and enforcement, the role of the department is increasingly centred on facilitation, trust and service. Technology will be central as systems evolve to align with the new framework,” he said.

He said familiarity with data platforms and automated processes would become integral, particularly for younger officers and staff who would lead the department in the coming years.

Reflecting on 2025, the CBDT chairman said the organisation functioned with “close oversight” on grievances, rectification of orders and pending appeals.

“Expectations were high and timelines demanding, yet colleagues across the country showed resilience and delivered,” he said, lauding the “sincerity” of tax officials even when their efforts were “unseen”.

He added that changing business and transaction patterns had brought new “financial complexities” while also offering opportunities to build sharper insight and capability, underscoring the need for continuous learning.

Mr. Agrawal also asked officials to strengthen “behavioural” administration through the NUDGE framework, or Non-intrusive Usage of Data to Guide and Enable, to foster voluntary compliance through better use of data.

“These values live through our decisions, big or small…every member strengthens the integrity of the tax system and the work we do each day quietly supports the nation’s financial architecture,” he wrote.

“As 2026 unfolds, may we work together with diligence, clarity, and purpose,” he added.