The central government’s fact-checking agency, the Press Information Bureau (PIB) Fact Check unit, on 1 January 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 1 April 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 ₹24 lakh will attract a 30% tax rate.
