The Income-tax Act, 2025 has replaced the Income-tax Act, 1961 with effect from 1 April 2026. The aim is a simpler, shorter law. Tax rates and most obligations are largely the same, but the terminology, section numbers and forms have changed. Here is what every taxpayer, business owner and TDS deductor should know.
1. “Tax year” replaces previous year and assessment year
Under the old law, income of FY 2025-26 was assessed in AY 2026-27. The new Act uses a single concept, the tax year: the financial year in which income is earned. Income earned from 1 April 2026 to 31 March 2027 is “tax year 2026-27”.
2. Which law applies to which year?
- FY 2025-26 and earlier: governed by the Income-tax Act, 1961. Returns filed in 2026, and notices and assessments for these years, continue under the old Act.
- Tax year 2026-27 onwards: governed by the Income-tax Act, 2025 and the Income-tax Rules, 2026.
3. New section numbers for common provisions
| Provision | Old Act (1961) | New Act (2025) |
|---|---|---|
| Return of income | Section 139 | Section 263 |
| Tax audit | Section 44AB | Section 63 |
| TDS (salary, rent, contracts, fees, etc.) | Sections 192–195 | Section 393 |
| TCS | Section 206C | Section 394 |
| Advance tax instalments | Section 211 | Section 408 |
| Interest for default / deferment of advance tax | Sections 234B / 234C | Sections 424 / 425 |
| Intimation and scrutiny assessment | Section 143 | Section 270 |
| Reassessment notice | Section 148 | Section 280 |
4. New forms for TDS and tax audit
- Quarterly TDS statements: Form 138 (salary, earlier 24Q), Form 140 (resident non-salary, earlier 26Q), Form 144 (non-resident, earlier 27Q) and Form 143 (TCS, earlier 27EQ)
- TDS certificates: Form 130 (earlier Form 16) and Form 131 (earlier Form 16A)
- Tax audit report: Form 26 (earlier Forms 3CA/3CB/3CD)
TDS deductors must now quote the new section codes under Section 393 in challans and statements for deductions made after 31 March 2026.
5. ITR due dates from tax year 2026-27
- 31 July: individuals without business income
- 31 August: non-audit business and professional cases
- 31 October: audit cases and companies
- 30 November: transfer pricing cases
What should you do now?
- Update payroll and accounting software to the new TDS section codes and forms
- When you receive a notice, check whether it is issued under the 1961 Act or the 2025 Act
- Review your advance tax for tax year 2026-27 before the 15 December instalment
For a complete list of our services under the new law, see Income Tax Compliance under the Income-tax Act, 2025.
Talk to Om Jha & Associates
Our office in Dwarka, New Delhi handles the complete process for you. Call or WhatsApp +91-9899129125, email opjhaom@gmail.com, or book a free consultation. Office hours: Monday to Saturday, 10 am to 7 pm.