The government’s fact-checking agency, Press Information Bureau PIB Fact Check, on January 1 refuted claims circulating on social media that “the 85% tax was levied on transactions exceeding ₹10 lakh.” The PIB Fact Check unit refuted this claim and said that income tax is “collected only on income and not on transactions.”
He further clarified that there is no provision in the Income Tax Act to impose any kind of tax on banking transactions exceeding ₹10 lakhs.
What does the viral video claim?
A clip shared by the Instagram account ‘Manjju Choudhary’ claims that once the bank transaction goes over ₹10 lakh, the government demands 85% tax. The video further claims that the government does not consider whether money is “black, yellow or white” and simply calls for taxing all such transactions.
Income tax rules from 2026 onwards
From April 1, 2026, India’s tax system will undergo a major overhaul as the government will introduce the new Income Tax Act, 2025, which will replace the Income Tax Act, 1961.
Simpler rules for easier compliance
The primary goal of the new law is to simplify tax rules so that individuals and businesses can understand and comply with them more easily. While the basic structure of taxation will remain the same, the language and procedures will be simplified to reduce disputes and litigation.
No income tax until ₹12 million
Under the new regime, the tax breaks announced in the 2025 budget will continue. Individuals with annual income up to ₹12 million will not have to pay any income tax
The government hopes these reforms will help taxpayers comply with the law with confidence, reduce legal disputes and make the tax system more transparent and user-friendly.
The new system will not allow exemptions or deductions, but offers lower tax rates. Income from ₹4 lakh up to ₹8k will be taxed at 5% while earnings will be higher ₹24 million will have a 30% tax rate.
