Income-tax Act, 2025

Also called New Income Tax Act and ITA 2025

The law that replaced India's Income-tax Act, 1961 from 1 April 2026. It did not change the tax slabs or rates, but it rewrites the law in simpler language, renumbers almost every section, and replaces the old previous year and assessment year with a single tax year.

Why it matters

Income earned up to 31 March 2026 is still filed under the 1961 Act and income from 1 April 2026 under the new one, so for a while founders and their CAs work with both. Familiar section numbers such as 80C or 80-IAC have new numbers, so an agreement, policy or ESOP plan that quotes a section is worth checking against the new Act.

For example

A founder's salary for FY 2025-26 goes on a return filed in 2026 under the old Act, while the salary for tax year 2026-27 is the first to be filed under the Income-tax Act, 2025, in 2027.

Go deeper

Income Tax Act 2025: Shift from Assessment Year to Tax Year TaxGuru · article A chartered accountant's explainer of how the Income-tax Act, 2025 took over from the 1961 Act on 1 April 2026: which years stay under the old law, when the first returns under the new one are due, and what the move to a single tax year changes in filing. Open taxguru.in →

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