The Prarambh 2026 outreach campaign is the Income Tax Department’s nationwide initiative to help taxpayers and stakeholders navigate the new law. Mumbai, which accounts for a significant share of India’s direct tax collections, has been one of its key stops. On Tuesday, the Office of the Principal Chief Commissioner of Income Tax organised a major outreach event that drew more than 700 participants, including chartered accountants, corporate executives, tax professionals, and industry representatives.
Among the announcements made at the event was the launch of two taxpayer tools. One of them, Kar Saathi, is attracting attention for what it signals about the future direction of tax administration.
What Is Kar Saathi
Kar Saathi is an AI-based chatbot designed to provide taxpayers with round-the-clock assistance on the new Income Tax Act, 2025. It has been developed to answer queries relating to return filing, tax payments, TDS provisions, and transitional issues — the kinds of questions taxpayers most commonly seek help with and which have historically required either a helpline call or consultation with a chartered accountant.
The department has also launched Kar Setu, a structured FAQ booklet that maps provisions of the old Income Tax Act, 1961 to their equivalents in the new Act. The two tools are intended to work together: Kar Setu as a reference document, and Kar Saathi as an on-demand query interface.
The rationale behind both is straightforward. The new Act has been completely renumbered, with every section and sub-clause assigned a new reference. Taxpayers, professionals, and businesses that have built compliance workflows around the old numbering system must now locate equivalent provisions within the new structure. Kar Setu provides that mapping, while Kar Saathi handles the questions a booklet cannot address.
What Changed in the Law
The Income Tax Act, 2025 is not an amendment to the 1961 Act. It is a complete replacement, drafted from scratch with the stated objective of reducing complexity, consolidating provisions, and creating a compliance framework suited to a digital economy.
Exemption limits on children’s education allowances, meal benefits, and gifts have been revised. Form 16 — the TDS certificate salaried employees have received from employers for decades — has been replaced by a new system-generated Form 130.
The shift to Form 130 is structural. Rather than being prepared by an employer’s payroll team, the document is generated directly from department records, aligning the certificate with data already held by the department and reducing the scope for discrepancies between the TDS deposited and the amount certified to the employee.
At Tuesday’s event, department officials gave detailed presentations on the revised structure and simplified provisions. Questions from attendees focused on return filing procedures, payment timelines, and the mechanics of transitioning assessments currently underway under the old law.
AI in Tax: Where This Is Heading
Kar Saathi is the most visible AI initiative in the current rollout, but it forms part of a broader trajectory. The department has progressively digitised its operations through faceless assessments, faceless appeals, and the Annual Information Statement, which consolidates a taxpayer’s financial data across banks, brokers, mutual funds, and property registrars into a single view.
Whether AI tools will play a more direct role in assessment and audit processes under the new framework has not yet been formally outlined. The department’s stated objective, reiterated across multiple Prarambh events, is to use technology to make compliance more accessible to a wider base of taxpayers, rather than only those with access to professional advice.
The first full filing cycle under the new Act will be the real test of how effectively the transition has been managed. Compliance rates, rectification volumes, and early dispute data will indicate whether the simplification promised by the law has translated into simplification in practice.
For now, the department is doing what it can within the time available: explaining the law, one room at a time.
The Income Tax Act, 2025, has been in effect since 1 April 2026.
