The Income-tax Act, 2025 replaces the Income-tax Act, 1961 and is in force from 1 April 2026. It is a restructuring of the law rather than a change in tax rates, but several terms, section numbers and forms you are used to have changed. Here is what taxpayers should know.
Tax Year replaces Previous Year and Assessment Year
Under the 1961 Act, income earned in a “previous year” was assessed in the following “assessment year”. The 2025 Act uses a single concept, the Tax Year: the twelve months starting on 1 April, in which the income is earned and for which tax is computed. Income earned up to 31 March 2026 continues to be governed by the 1961 Act.
Sections are renumbered
The new Act is shorter and re-organised, so the section numbers that professionals and taxpayers have used for decades no longer apply. References in your invoices, TDS certificates, agreements and internal checklists to old section numbers should be reviewed. Ask your Chartered Accountant for a mapping of the sections that matter to you.
Rates and advance-tax dates are unchanged
The Act does not by itself alter the tax slabs or the advance-tax due dates. The instalment dates remain 15 June, 15 September, 15 December and 15 March. Our article on advance tax explains how they work.
Forms and statements have new names
Some familiar forms have been renumbered. For example, the tax credit statement earlier known as Form 26AS is now issued as Form 168. Expect new return forms and new names for other statements as the rules are notified.
What you should do now
- Check your tax credit statement (formerly Form 26AS) against your own records before filing.
- Update references to old section numbers in your templates and checklists.
- Keep supporting documents for deductions and exemptions organised by Tax Year.
- Speak to your CA before restructuring salary, investments or business arrangements based on old section references.
This article is a general overview and not professional advice. Please refer to the Act, the Income-tax Rules and the latest notifications, or consult a Chartered Accountant, before acting.
This article gives general information only and is not professional advice. Rules, rates and due dates change from time to time. Please consult a Chartered Accountant before acting on any tax, GST or legal matter.