The government’s fact-checking agency, the Press Information Bureau PIB Fact Check unit, on January 1 refuted a claim circulating on social media that an “85% tax has been imposed on transactions exceeding 10 lakh.” The PIB Fact Check unit debunked the claim, stating that income tax is “levied only on income, not on transactions.”
It further clarified that there is no provision in the Income Tax Act for imposing any kind of tax on bank transactions exceeding 10 lakh.
What does the viral video claim?
A clip shared by the Instagram account ‘Manjju Choudhary’ claims that once a bank transaction exceeds 10 lakh, the government demands 85% tax. The video further alleges that the government does not consider whether the money is “black, yellow, or white” and simply seeks tax on all such transactions.
Income Tax rules from 2026
From April 1, 2026, India’s tax system will undergo a major change as the government implements the new Income Tax Act 2025 replacing the Income Tax Act of 1961.
Simpler rules to ease compliance
The primary aim of the new Act is to simplify tax rules, making it easier for individuals and businesses to understand and comply. While the basic structure of taxation will remain the same, the language and procedures will be simplified to reduce disputes and litigation.
No tax on income up to 12 lakh
Under the new regime, the tax relief announced in the 2025 Budget will continue. Individuals with an annual income of up to 12 lakh will not have to pay any income tax
The government hopes these reforms will help taxpayers comply with the law confidently, reduce legal disputes, and make the tax system more transparent and user-friendly.
The new system will not allow exemptions or deductions, but it offers lower tax slab rates. Income from 4 lakh to 8 lakh will be taxed at 5%, while earnings above Rs 24 lakh will attract a 30% tax rate.
