The Income-tax Act, 2025 is now in force
From 1 April 2026 the 1961 Act is replaced. Rates are largely unchanged; the vocabulary and section numbers are not.
The Income-tax Act, 2025 came into force on 1 April 2026 and replaces the Income-tax Act, 1961. Returns for the year ended 31 March 2026 are still filed under the old Act.
What changes
The most visible change is the tax year. The previous year and assessment year are replaced by a single tax year that follows the financial year. Sections have been renumbered and consolidated, and many forms carry new numbers.
For most businesses and individuals, rates, slabs and the substance of deductions continue broadly as before. The work is in updating references: in invoices that cite TDS sections, in agreements, in board resolutions and in internal policies.
What to do
Check that accounting and payroll software has been updated for the new references. Review standard contract clauses that refer to the 1961 Act. Keep the two regimes distinct in your records: notices and assessments for earlier years continue under the old law.
Our clients' calendars and computations have been moved to the new Act. If you would like your contracts or systems reviewed for references to the old one, write to us.
General information, current at the date shown. It is not advice on your circumstances; write to us before acting on it.