Does the Income-tax Act, 2025 or the 1961 Act apply to my income?

Which Act governs what

"Tax year" replaces "previous year" and "assessment year"

Under the 1961 Act, income of a previous year (for example FY 2025-26) was assessed in the following assessment year (AY 2026-27). The 2025 Act uses a single tax year: the financial year in which the income is earned. The first is tax year 2026-27.

How we cite sections on this website

Because most readers know the old numbers, we give both: for example, section 54 of the Income-tax Act, 1961 (now section 82 of the Income-tax Act, 2025), and after that simply "section 54 (now 82)". Forms are cited the same way, for example "Form 26QB (now Form 141)". Our old and new section finder lists the common sections and forms side by side.

What actually changed

The 2025 Act is mainly a rewrite in simpler language, with fewer sections, tables instead of long provisos, and renumbered forms. Most rates, thresholds and concepts carry over. For example, the new regime of section 115BAC is now section 202, the capital-gains exemption of section 54 is now section 82, and the TDS sections 192 to 194S are now consolidated in sections 392 and 393. Many forms have new numbers: Form 16 is now Form 130, the property TDS statement Form 26QB is now Form 141, Form 26AS and the AIS are replaced by Form 168, and the tax audit report (Forms 3CA, 3CB and 3CD) is now Form 26. The ITR forms keep their names (ITR-1 to ITR-7), but the updated return ITR-U is now ITR-UN.

What to do

• Read every notice against the right Act. A notice for AY 2023-24 will quote 1961 Act sections; a notice about TDS for this year will quote 2025 Act sections.
• Update accounting and payroll software for the new section references and payment codes.
• Keep both references in your records for a few years, because the two Acts will run side by side for pending matters.