Income Tax

The New Income-tax Act, 2025: What Actually Changed (Effective 1 April 2026)

By CA Aman Singhal22 July 20266 min read

From 1 April 2026, the Income-tax Act, 1961 has been repealed and replaced by the Income-tax Act, 2025, alongside a fresh set of Income-tax Rules, 2026 — the biggest reset in India’s direct tax law in over six decades. Here is what genuinely changes for a regular taxpayer, and what doesn’t.

The one big terminology change: “Tax Year”

The separate ideas of “Previous Year” (when you earn the income) and “Assessment Year” (when you file and it gets assessed) are gone. Both are merged into a single Tax Year, running 1 April to 31 March — the same period you already know, just one name instead of two.

Same tax, cleaner law

This is a simplification and consolidation exercise, not a tax-policy overhaul. Slab rates, deduction limits and exemptions are unchanged. What changed is the law’s structure: obsolete and redundant provisions were stripped out, cutting the Act from over 800 sections to roughly 536, organised more logically with far fewer cross-references to chase.

Where the familiar section numbers moved

Every section you know has a new number. A few of the most commonly used:

Section 192 (TDS on salary) → Section 392
Sections 194-series (TDS on rent, professional fees, contractors, dividends, etc.) → consolidated into Section 393
Section 234A (interest for late filing) → Section 423
Section 234B (interest for default in advance tax) → Section 424
Section 234C (interest for deferred instalments) → Section 425
Section 234F (late filing fee) → Section 439
Section 54 (capital gains exemption, house reinvestment) → Section 82

Trying to find where a specific old section landed? Use our free Old vs New Section Mapping tool — it’s a searchable table of old-to-new section numbers across TDS, TCS, interest, capital gains and returns.

A few genuine changes to note

TCS tweaks: the rate on liquor, scrap and minerals rises from 1% to 2%; TCS on LRS remittances for education and medical treatment drops from 5% to 2%, and overseas tour packages move to a flat 2%.
More breathing room to correct returns: the window to file revised or updated returns has been extended, reducing the compliance risk of an honest mistake.

For day-to-day filing, the practical impact is small — same taxes, same deductions, new section numbers. If a notice or form references a section you don’t recognise, look it up in our mapping tool, or ask a CA to confirm nothing in your specific situation actually changed.

Try the Old vs New Section MappingFree, CA-verified, runs in your browser.

This article is for general information based on provisions for FY 2025-26 and is not individual tax advice. Rules change and exceptions apply — please confirm with a qualified Chartered Accountant before acting.