The Lok Sabha passed the Income-Tax (No. 2) Bill, 2025, which will replace the Income-tax Act, 1961, and is set to take effect on April 1, 2026. The bill aims to simplify the direct taxation regime by consolidating and modernizing existing provisions.

The CBDT has modified rules for inoperative PANs, providing relief from higher TDS/TCS rates for certain periods if PANs become operative by specified deadlines. Previously, unlinked PANs (due to non-Aadhaar linkage) led to severe tax consequences. Circular No. 9/2025 clarifies that normal rates apply if PANs are linked within the new timelines, reducing "short-deduction/collection" demands.