What Happened
- The Income Tax Act, 2025 — which replaces the 64-year-old Income Tax Act, 1961 — takes effect from April 1, 2026, introducing sweeping changes in how individual taxpayers interact with the tax system.
- Forms 15G and 15H (used to claim TDS exemption on interest income by individuals below the taxable threshold and senior citizens respectively) have been merged into a single unified Form 121, issued under Section 393(6) of the IT Act, 2025; CBDT has mandated a structured Unique Identification Number (UIN) system for Form 121 declarations.
- Form 26AS — the Annual Tax Credit Statement that allowed taxpayers to verify TDS deducted against their PAN — has been renamed Form 168, which functions as the Annual Information Statement (AIS); it is auto-generated and does not require manual data entry.
- Form 16 (TDS certificate for salaried employees) is now Form 130; Form 16A is now Form 131; Form 27D is now Form 133; Tax audit forms 3CA, 3CB, and 3CD have been consolidated into a single Form 26.
- The concept of "Assessment Year (AY)" and "Financial Year (FY)" has been replaced by a single unified "Tax Year" — FY 2026-27 is designated Tax Year 2026-27, eliminating the one-year offset confusion.
- The new Act has 536 sections across 23 chapters (versus 819 sections across 47 chapters in the 1961 Act), drafted in plain language with formulas and tables replacing complex prose; redundant and obsolete provisions removed.
Static Topic Bridges
Income Tax Act, 2025 — Legislative Journey and Architecture
The Income Tax Act, 2025 was introduced as the Income-Tax (No.2) Bill, 2025 on August 11, 2025, following the withdrawal of an earlier version introduced in February 2025. The Lok Sabha passed it on August 11-12, 2025; the Rajya Sabha cleared it on August 12, 2025; Presidential assent was received on August 21, 2025. The new Act is built around the SIMPLE framework: Streamlined, Integrated, Minimized Litigation, Practical & Transparent, Learn & Adapt, Efficient Tax Reforms. It replaces the 1961 Act that had accumulated 64 years of amendments, circulars, and judicial interpretations making it unwieldy. The new code uses tabular formats, formulas, and plain language; removes obsolete provisions; and restructures sections logically.
- Old Act (1961): 819 sections, 47 chapters; New Act (2025): 536 sections, 23 chapters
- Presidential assent: August 21, 2025; effective date: April 1, 2026 (Tax Year 2026-27)
- Key innovation: "Tax Year" replaces Assessment Year + Financial Year duality
- Administered by: CBDT (Central Board of Direct Taxes) under the Finance Ministry
Connection to this news: The renaming of forms (15G/15H → Form 121; 26AS → Form 168) is a direct outcome of the new Act's renumbering exercise — every form previously cited in the 1961 Act has been renumbered in the 2025 Act to match its new section numbering scheme.
TDS and Form 15G/15H (Now Form 121) — Tax Deduction at Source Architecture
Tax Deduction at Source (TDS) is a mechanism under the Income Tax law that requires specified persons making payments (banks paying interest, employers paying salary, etc.) to deduct tax at the prescribed rate before remitting the payment to the recipient. Form 15G (for individuals below 60 years) and Form 15H (for senior citizens above 60 years) were self-declaration forms submitted by recipients to declare that their income does not exceed the basic exemption limit, thus requesting the payer not to deduct TDS. The new Form 121 (under Section 393(6) of IT Act, 2025) merges both into one, with a Unique Identification Number (UIN) system to prevent duplicate submissions across multiple banks.
- TDS on bank interest: Section 194A (old Act) / equivalent provision in 2025 Act
- Form 15G: individuals below 60 years; Form 15H: senior citizens (60+ years)
- Merged into Form 121 under Section 393(6) of Income Tax Act, 2025 — effective April 1, 2026
- UIN system: prevents the same individual from submitting multiple declarations across banks without central tracking
- Basic exemption limit (new regime, FY26): ₹3 lakh; senior citizens: ₹3 lakh; super seniors (80+): ₹5 lakh
Connection to this news: The Form 121 merger reduces paperwork for crores of depositors — particularly senior citizens with fixed deposit income — by eliminating the need to determine which form applies and creating a single standardised declaration framework.
Annual Information Statement (AIS) — Form 26AS to Form 168
Form 26AS was introduced under Section 203AA of the Income Tax Act, 1961 as the Annual Tax Statement, evolving into the Annual Information Statement (AIS) which tracks all financial transactions linked to a taxpayer's PAN — TDS, TCS, advance tax, self-assessment tax, high-value transactions, and more. The AIS also captures data from financial institutions, mutual funds, registrars, and other specified entities. Under the new IT Act, 2025, this becomes Form 168. The auto-population of pre-filled ITR forms from Form 168 data is a key step toward reducing tax filing errors and encouraging voluntary compliance.
- Form 26AS (now Form 168): auto-generated; no manual input required from taxpayer
- Data sources: banks (TDS), employers (TDS), registrars (property transactions), MFs, foreign remittances
- Taxpayer Informational Summary (TIS) and AIS complement each other for complete income picture
- CBDT's Compliance Portal and AIS App provide real-time access to Form 168 data
Connection to this news: Renaming Form 26AS to Form 168 under the new Act is more than cosmetic — it signals the complete integration of all financial information (previously spread across 26AS and separate AIS) into a unified auto-populated statement, reducing scope for underreporting.
Key Facts & Data
- Income Tax Act, 2025: Presidential assent August 21, 2025; effective April 1, 2026
- Old Act (1961): 819 sections, 47 chapters → New Act (2025): 536 sections, 23 chapters
- Forms 15G + 15H → merged into Form 121 (Section 393(6), IT Act 2025)
- Form 26AS → renamed Form 168 (Annual Information Statement)
- Form 16 (TDS cert, salary) → Form 130; Form 16A → Form 131; Form 27D → Form 133
- Tax audit forms 3CA + 3CB + 3CD → consolidated into Form 26
- "Assessment Year" + "Financial Year" → replaced by unified "Tax Year"
- UIN system for Form 121: prevents duplicate TDS exemption claims across banks
- CBDT mandated Form 121 UIN system: effective April 1, 2026