New Income Tax Act 2025: The new income tax law comes into effect from today, April 1, 2026 (Wednesday). The Income-tax Act, 2025, replaces the Income-tax Act, 1961.
The new Act aims to present the same tax policy in a more logical, accessible, and reader-friendly format.
The Income Tax department has said that its e-filing portal will facilitate compliance under both the old and new Income Tax Acts in the transition period, and all assessments, appeals, and other proceedings relating to earlier years will continue to be conducted under the old Act until their final resolution.
Taxpayers filing returns for AY 2026-27 (pertaining to the period governed by the old Act) in July 2026 will do so using the forms prescribed under the old Act.
New Income Tax Act: Advance Tax
Advance tax payments for Tax Year 2026-27, commencing from June 2026, will be made in accordance with the new Act.
The Income Tax Act, 2025, simplifies the tax timeline by doing away with the distinction between the assessment year and the previous year, replacing it with a single "tax year" framework. It also allows taxpayers to claim TDS refund even when ITRs are filed after deadlines, without any penal charges.
