Prepared on 26 October 2026. This article provides general information, not advice on a particular case. Check subsequent amendments, notifications and the facts of your matter before acting.
The Income-tax Act, 2025 came into force on 1 April 2026, except where otherwise provided. For businesses, the immediate task is to distinguish current-year work from filings and proceedings that continue under the earlier law. A new statute does not mean that earlier records, assessments or obligations disappear.
Which year and which law?
The new Act uses the term Tax Year for the April–March financial year. Income earned during FY 2026–27 falls in Tax Year 2026–27. The Income Tax Department explains that returns for income earned during FY 2025–26, filed for AY 2026–27, remain governed by the Income-tax Act, 1961. Earlier-year proceedings continue according to the transition provisions.
For example, a business may be completing an AY 2026–27 return while also maintaining records and making payments for Tax Year 2026–27. Those tasks should not be treated as belonging to the same statutory period merely because both occur after April 2026.
Do not carry old references forward mechanically
The Income-tax Rules, 2026 and corresponding forms accompany the new framework. Before reusing a checklist, agreement, certificate or software mapping, check the relevant provision and form for the period concerned. The Department provides comparison utilities for old and new provisions, rules and forms.
A practical transition checklist
- Label working papers with the relevant period and governing Act.
- Review accounting and payroll software settings before relying on new section or form references.
- Keep earlier-year notices, acknowledgements, loss records and supporting schedules separately identifiable.
- Reconcile tax payments and deductions with the appropriate year and reporting requirements.
- Confirm the applicable rates, conditions and deadlines from the current law and notifications; the title “2025 Act” does not by itself determine the tax payable.
As an internal control, maintain a short transition register: document or process, old reference, verified new reference, responsible person and completion date. This is a suggested working practice, not a prescribed statutory form.
Official references
- CBDT: commencement of the Income-tax Act, 2025
- Income Tax Department: objective, Tax Year and transition FAQs
- Official Act, Rules, forms and comparison resources
© 2026 Aanand & Co. Original commentary; rights in official publications and other third-party material remain with their respective owners.
