The Central Board of Direct Taxes (CBDT), under the Ministry of Finance, announced that the Income-tax Act, 2025 has come into force from 1 April 2026, replacing the Income-tax Act, 1961. The new law aims to simplify and modernise India’s direct tax framework through clearer language, a streamlined structure, and a more user-friendly format, while retaining the existing tax policy framework. The Act was passed by Parliament on 12 August 2025 and received Presidential assent on 21 August 2025. To operationalise the new legislation, the Income-tax Rules, 2026 were notified on 20 March 2026, along with simplified and standardised compliance forms. These changes are intended to enhance ease of compliance and improve taxpayer experience. The implementation of the new Act marks a significant transition in India’s tax administration system and reflects a step towards a more efficient and accessible taxation regime.
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
******
New Delhi, 1st April, 2026
Press Release
Income-tax Act, 2025 comes into force from 1st April, 2026
The Income-tax Act, 2025, a landmark reform in India’s direct tax framework, represents a comprehensive effort to simplify and modernise the country’s income-tax law, replacing the six-decade-old Income-tax Act, 1961. It marks a shift towards greater clarity and ease of compliance through simple language, a streamlined structure and a reader-friendly presentation, without altering the underlying tax policy.
The Bill was passed by the Parliament on 12th August, 2025, and received the assent of the Hon’ble President of India on 21st August, 2025, thereby becoming the Income-tax Act, 2025. ( Gazette Notification – Income-tax Act, 2025)
The Income-tax Rules, 2026 were notified by the Central Board of Direct Taxes on 20th March, 2026 to operationalise the provisions of the new Act. (Gazette Notification – Income-tax Rules, 2026).
The corresponding new Forms have also been notified. The Forms have been simplified, standardized and process re-engineered to make compliance simpler.
With its coming into force from 1st April, 2026, the Income-tax Act, 2025 marks a new chapter in India’s tax administration and an important step towards Viksit Bharat.
(V. Rajitha)
Commissioner of Income Tax
(Media & Technical Policy) &
Official Spokesperson, CBDT
The Income Tax Act 2025 applies for Tax Year 2026-27 onward. For AY 2026-27 (income of FY 2025-26), the old Act 1961 still governs , the ITR forms, deduction names, and section numbers in your return for this year remain unchanged.
Key mapping points practitioners need to know for FY 2026-27 filings (Tax Year 2026-27, starting April 1, 2026):
– Salary TDS: old Section 192 is now Section 392
– Resident non-salary TDS: old Sections 193-196 and others consolidated into Section 393 with a schedule of payment types
– Section 80C deductions: retained as deductions under Chapter VI, schedule mapping old 80C to new Section 123
– Section 87A rebate: retained under Section 159, same Rs 12 lakh threshold for new regime
– Advance tax: old Section 208-211 mapped to new Sections 446-449, same four-quarter schedule
For AY 2026-27 ITR filing this month: continue using the ITR forms available on incometax.gov.in under the old 1961 framework. The portal has not yet switched to Act 2025 forms for this assessment year.
WOULD LIKE TO SUBSCRIBE.