27 Feb 2026Quick answer: The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026. Tax rates and slabs did not change with it. The main differences are a single "tax year" in place of "previous year" and "assessment year", renumbered sections (for example, tax audit moves from section 44AB to section 63) and new forms such as Form 26 for the tax audit report. Income earned up to 31 March 2026 is still assessed under the 1961 Act.
Updated: 23 October 2026 | Regi Tom Antony & Associates, Chartered Accountants, Kochi
What is the Income-tax Act, 2025?
The Income-tax Act, 2025 is a rewrite of the 1961 Act in simpler language, with obsolete provisions removed and sections reorganised. It applies to income of tax year 2026-27 (1 April 2026 to 31 March 2027) onwards, alongside the new Income-tax Rules, 2026. For FY 2025-26, the return you file in 2026 (AY 2026-27) is still governed by the 1961 Act, its sections and its forms.
What is a "tax year"?
Under the 1961 Act, income of the "previous year" was taxed in the following "assessment year": income of FY 2025-26 was assessed in AY 2026-27. The 2025 Act uses one term, the tax year, which is the financial year in which the income is earned. Income earned between 1 April 2026 and 31 March 2027 is income of tax year 2026-27.
Old and new section numbers you will use most
| Subject | 1961 Act | 2025 Act |
|---|---|---|
| Tax audit | 44AB | 63 |
| Presumptive taxation (business and profession) | 44AD, 44ADA | 58 |
| Presumptive taxation (goods carriages) | 44AE | 61 |
| New tax regime | 115BAC | 202 |
| Rebate | 87A | 156 |
| Deduction for investments / health insurance | 80C / 80D | 123 / 126 |
| Capital gains exemptions | 54 / 54EC / 54F | 82 / 85 / 86 |
| TDS on salary | 192 | 392 |
| TDS on property purchase / payments to non-residents | 194-IA / 195 | 393 |
| TCS, including on LRS remittances | 206C, 206C(1G) | 394 |
| Higher TDS/TCS where PAN not furnished | 206AA / 206CC | 397(2) |
Check each reference against the official CBDT mapping before citing it in a filing. Source for the mapping: TaxGuru section-mapping table.
What changes for businesses?
- Tax audit: section 63 keeps the thresholds of ₹1 crore turnover (₹10 crore where cash receipts and payments are each within 5%) and ₹50 lakh for professionals. The report moves to Form 26, replacing Forms 3CA, 3CB and 3CD. See our tax audit guide.
- Return due dates for tax year 2026-27: 31 July for individuals without business income, 31 August for business or professional income without audit, 31 October for audit cases, and 30 November where transfer pricing reports apply.
- Payments to MSMEs: the rule that payments to micro and small enterprises beyond 45 days (15 days without a written agreement) are deductible only when paid continues under the 2025 Act. Review your creditor ledger before the year end.
- Presumptive taxation for small businesses and professionals is in section 58. See our guide to sections 44AD and 44ADA.
What changes for individuals?
- Slabs, the ₹12 lakh tax-free limit under the new regime and the ₹75,000 standard deduction are unchanged.
- TCS on overseas tour packages is a flat 2%; education and medical remittances above ₹10 lakh attract 2%; other LRS remittances above ₹10 lakh attract 20%.
- A revised return can be filed up to 12 months from the end of the tax year.
- Forms are renamed and renumbered on the e-filing portal; your Form 16 and AIS will refer to the new sections from tax year 2026-27.
Advance tax dates for tax year 2026-27
| Due date | Cumulative advance tax |
|---|---|
| 15 June 2026 | 15% |
| 15 September 2026 | 45% |
| 15 December 2026 | 75% |
| 15 March 2027 | 100% |
Presumptive taxpayers pay in one instalment by 15 March 2027.
Frequently asked questions
When does the Income-tax Act, 2025 come into force?
From 1 April 2026, for income of tax year 2026-27 onwards.
Does the new Act change tax rates?
No. Rates and slabs carry over unchanged; the Act changes structure, terminology and section numbers.
Which Act applies to my return for FY 2025-26?
The Income-tax Act, 1961. Returns for AY 2026-27 use the 1961 Act sections and forms.
What replaces section 44AB?
Section 63 of the Income-tax Act, 2025, with the report filed in Form 26.
Regi Tom Antony & Associates helps businesses and individuals move their tax compliance to the new Act: section mapping for accounting systems, TDS and TCS set-up, tax audit and returns. Write to letstalk@rtaandassociates.com.
General information, not advice on your specific facts.
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