Income-tax Act, 2025: What Taxpayers Must Know from 1 April 2026
India’s Income-tax Act, 2025 took effect on 1 April 2026 and repealed the 1961 Act prospectively. The transition is not based merely on the date a taxpayer logs in or receives a notice: the applicable law depends on the relevant tax period and the nature of the obligation.
Current position in plain English
Decision table
| Situation in 2026 | Applicable framework | Practical action |
|---|---|---|
| ITR for income earned in FY 2025–26 | Income-tax Act, 1961; AY 2026–27 | Choose old-Act return/forms |
| Advance tax for Tax Year 2026–27 | Income-tax Act, 2025 | Use new-Act payment route |
| Notice for AY 2024–25 | Income-tax Act, 1961 and saving provisions | Respond under old-year section/process |
| Salary paid from April 2026 | Check 2025 Act TDS provisions and current forms | Use new-Act payroll mapping |
| Carried-forward credit or dispute | Transition/saving rules may apply | Preserve old-year computation and orders |
How to apply the rule
Transition rules are operational rules, not academic footnotes. Payroll, challans, return forms, notices and software may display both old and new references during 2026. Select the legal framework by the relevant tax period and event.
Do not translate section numbers from memory. Use the official mapping and read the current form instructions, because a familiar concept may appear under a new number or structure.
Retain old-year records even after repeal. A notice, appeal, refund, loss or tax credit for an earlier period can continue under the saving framework.
For Income Tax Act 2025 effective 1 April 2026, first identify the legal or contractual relationship, then separate the amount, event and deadline. Use one chronology across the portal, institution and supporting records. This prevents a correct fact from being submitted under the wrong year, account, policy clause or complaint route.
Practical example
A taxpayer files the return for income earned between 1 April 2025 and 31 March 2026 in July 2026. Although the filing date is after commencement of the new Act, the income period began before 1 April 2026, so the return remains under the old Act for AY 2026–27.
Action checklist
- Identify the income period before selecting any form or challan.
- Keep an old-to-new section and form mapping for payroll or tax teams.
- Use the portal tab for the correct Act.
- Do not replace old assessment-year records with tax-year labels.
- Update templates, engagement letters and software masters.
- Check official FAQs for transitional payments, TDS, returns and proceedings.
Evidence and document checklist
- Prior-year returns and computations
- Advance-tax and self-assessment challans
- TDS certificates and payroll mappings
- Carry-forward loss and credit schedules
- Pending notices, appeals and orders
- Official form-mapping guide and portal acknowledgement
Common mistakes
- Choosing the new Act solely because filing occurs after 1 April 2026
- Calling AY 2026–27 Tax Year 2026–27
- Quoting old section numbers for new-year transactions
- Assuming all deductions or rates changed
- Using a new challan for an old-year liability
- Discarding earlier records after repeal
Red flags
- A payment made under the wrong Act or year
- Software that maps all 2026 filings to the new Act
- Pending litigation with carried-forward consequences
- Cross-border, residency or withholding issues spanning the transition
- A form unavailable or unclear on the portal
Escalation route
Use the e-Filing help pages and grievance route for portal mapping issues. Obtain specialist advice where an old-year order, appeal, withholding event or credit crosses the commencement date.
When escalating, include the original complaint, acknowledgement, concise chronology, disputed amount, rule or clause relied upon and the exact relief requested. Do not send passwords, PINs, OTPs or unrelated identity documents.