Mumbai: A new simplified Income Tax Act is likely to come into force on April 1, 2008, replacing the existing Income Tax Act 1961, finance minister P Chidambaram said.

Chidambaram was speaking to reporters after receiving the draft of a simpler and rational income tax law, prepared by officials of the Central Board of Direct Taxes.

He said the report is an exercise for the future and is not aimed at amending the existing Income Tax Act 1961. "This report is about a brand new Income Tax Act, which if all goes well, will come into force from April 1, 2008, that is, assessments made for 2009-10," he said, adding, the new Act will hopefully come into force from April 2008 subject to Parliament approving it "well in time".