Income-tax Act, 2025: what changed and when

The short version

The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026. It received Presidential assent on 21 August 2025. It is a rewrite in simpler language: about 536 sections, 23 chapters and 16 schedules, down from 800-plus sections.

Most tax rates and concepts stay the same. What changes is the numbering, the forms and some wording.

Which law applies to which year

Key changes in plain words

• "Tax year" replaces "previous year" and "assessment year". Tax year 2026-27 means 1 April 2026 to 31 March 2027.
• New section numbers. 80C is now section 123, 87A rebate is section 156, the new regime (115BAC) is section 202, and all TDS for residents sits in one table in section 393.
• New form numbers. Form 16 → Form 130, Form 16A → Form 131, 15G/15H → Form 121, Form 26AS → Form 168, 24Q → Form 138, 26Q → Form 140.
• Tables instead of long provisos. TDS rates, deductions and exemptions are now in tables and schedules, so they are easier to look up.
• Digital assets (crypto, NFTs) are explicitly covered in search, seizure and undisclosed income provisions.

What did not change

• Slab rates (the Finance Act 2026 kept them as they were).
• The five heads of income.
• Residential status tests.
• The idea of a default new regime with an option for the old regime.

Sources

• Income-tax Act, 2025