Income-tax Act, 2025: the new law · Tax Year 2026-27
Income-tax Act, 2025: what changed for individuals
The Income-tax Act, 2025 replaces the 1961 Act from the tax year 2026-27. For most individuals the slabs and deductions you know carry over; what changes is the vocabulary, section numbers, form numbers and the statements you read. Here is a clear list.
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The Income-tax Act, 2025 applies from the tax year 2026-27, which began on 1 April 2026. For most individuals, what you do does not change: you report salary, house property, business, capital gains and other income, claim deductions, and compare regimes. What changes is the language and numbering: "tax year" is the only year term, sections are renumbered (TDS on salary is now 392), forms have new numbers (Form 16 becomes Form 130, Form 26AS becomes Form 168), and some old provisions are dropped.
This guide lists only changes that the Act, the Finance Act 2026 or TaxCare's reference files record. TaxCare's own rule set for the tax year 2026-27 is still provisional: it repeats the signed-off 2025-26 values and is replaced with verified figures before any 2026-27 return is filed. The figures quoted below are the ones checked against the Act and the Finance Act 2026.
The Act comes into force on 1 April 2026 (section 1(3)), and section 3 defines the tax year as the twelve months of the April–March year starting on 1 April.
1. One year term: "tax year"
The Act uses one term, tax year, for the 12 months from 1 April in which income is earned. Income earned in 2026-27 is reported in the return filed after 01-Apr-2027. See what is a tax year.
2. Section numbers are renumbered
Item | 1961 Act | 2025 Act |
|---|---|---|
TDS on salary | 192 | 392 |
TDS on accumulated PF balance | 192A | 392(7) |
Most other TDS (interest, rent, contractors, professional fees, dividends) | 193 to 194-series | 393(1) table entries |
TDS on non-residents | 195, 196A to 196D, 194E, 194LB to 194LC | 393(2) table entries |
TDS on winnings, cash withdrawals, partner payments | 194B, 194BB, 194BA, 194N, 194T and others | 393(3) table entries |
Tax collected at source (TCS) | 206C-series | 394(1) table entries |
Lower or nil deduction certificate | 197 | 395 |
Late fee on TDS statement | 234E | 427 |
Interest on demand | 220(2) | 411 |
See the full chart in the TDS rate chart for the tax year 2026-27. Rows for years up to 2025-26 in your AIS keep their 1961 codes.
Other provisions individuals use often also have new numbers:
Item | 1961 Act | 2025 Act |
|---|---|---|
Standard deduction on salary | 16(ia) | 19(1) table |
House property: annual value, 30% deduction and interest | 23, 24 | 21, 22 |
80C-type investments (₹1,50,000 limit) | 80C | 123 |
Employer NPS contribution | 80CCD(2) | 124(1) |
Health insurance | 80D | 126 |
Rebate | 87A | 156 |
Short-term capital gains on listed equity | 111A | 196 |
Long-term capital gains on listed equity | 112A | 198 |
New tax regime | 115BAC | 202 |
Filing the return, belated, revised and updated returns | 139 | 263 |
Interest for late return, short advance tax, deferred instalments | 234A, 234B, 234C | 423, 424, 425 |
Late filing fee | 234F | 428 |
3. Forms are renumbered
Purpose | 1962 Rules | 2026 Rules |
|---|---|---|
Annual Tax Statement and AIS format | Form 26AS | Form 168 |
TDS certificate on salary | Form 16 | Form 130 |
TDS certificate other than salary | Form 16A | Form 131 |
TCS certificate | Form 27D | Form 133 |
Quarterly TDS statement, salary | Form 24Q | Form 138 |
Quarterly TDS statement, other than salary | Form 26Q | Form 140 |
Challan-cum-statement for property, rent and contractor TDS | Form 26QB, 26QC, 26QD | Form 141 |
Statement of financial transactions | Form 61A | Form 165 |
Declaration for no deduction (15G / 15H) | Form 15G / 15H | Form 121 |
Foreign remittance statement | Form 15CC | Form 147 |
Statement where no PAN is given | Form 60 / 61 | Form 97 / 98 |
The AIS format itself is provided in Form 168 read with rule 245 of the Income Tax Rules, 2026.
4. Form 168 replaces Form 26AS
For the tax year 2026-27 and later, your tax credit statement is Form 168, not Form 26AS. Up to the tax year 2025-26 the statement is still Form 26AS. The layout is similar: Part I lists TDS by deductor, with a four-digit TRACES code on each row instead of the section number.
5. AIS has fewer categories
The AIS Handbook for the 2025 Act (May 2026) lists 57 information categories, down from 59. Two TDS codes, 194LD (interest on bonds and government securities) and 194F (repurchase of units by mutual funds), and five TCS codes (206CR, 206CK, 206CM, 206CN, 206CP) have no counterpart in the new Act. Labels lose their old "u/s" suffixes. Information received under tax treaties moves from section 90 or 90A to section 159.
6. Return types and deadlines
Under section 263 of the 2025 Act, as amended by the Finance Act 2026:
- A belated return can be filed within nine months from the end of the tax year (31 December).
- A revised return can be filed within twelve months from the end of the tax year (31 March). A revision filed more than nine months after the end of the tax year carries a fee of ₹1,000 if total income is up to ₹5 lakh, and ₹5,000 otherwise (section 428(b)).
- An updated return (ITR-U) carries extra tax of 25%, 50%, 60% or 70% of the tax and interest, depending on how late it is filed (section 267(5)).
- The due date is 31 July for most individuals; for the tax year 2026-27 onwards it is 31 August for people with business or professional income whose accounts do not need an audit.
What stays the same
For the tax year 2026-27, the Act and the Finance Act 2026 keep these figures from 2025-26:
- The new regime is still the default: you are taxed under it unless you opt out (section 202(1)).
- The new regime slabs (nil up to ₹4 lakh, then 5%, 10%, 15%, 20%, 25% and 30% above ₹24 lakh), and the rebate that makes tax nil up to ₹12 lakh of taxable income (section 156).
- The old regime slabs (nil up to ₹2.5 lakh, ₹3 lakh for those 60 or more and ₹5 lakh for those 80 or more; then 5%, 20% and 30%).
- The standard deduction: ₹75,000 in the new regime and ₹50,000 in the old.
- The 4% health and education cess.
- The employer NPS deduction in the new regime.
- Capital gains holding periods (12 months for listed securities and equity funds, 24 months for others) and rates (20% on short-term gains on listed equity; 12.5% on long-term gains above ₹1,25,000).
- Interest at 1% a month for a late return, short advance tax and deferred instalments, and the ₹5,000 or ₹1,000 late filing fee.
What to do now
- If you are filing for the tax year 2025-26, nothing changes: it is the 1961 Act, Form 26AS and the old section numbers.
- Learn the new numbers for TDS and forms, because they will show in the AIS and Form 168 for 2026-27.
- Keep Form 130 (the new Form 16) and compare it with Form 168.
- Check every 2026-27 figure against the Act and the Finance Act 2026, as this guide does, rather than assuming it is unchanged.
How TaxCare helps
TaxCare keeps the 1961 Act rules for 2025-26 and earlier and a separate, clearly labelled provisional set for the tax year 2026-27, and it selects Form 26AS or Form 168 by tax year. It shows old and new section codes side by side where it reads your statements, and lets you compare regimes. Rules for 2026-27 are replaced with verified figures before any 2026-27 return is filed. See pricing and old vs new tax regime.
This guide gives general information and is not professional tax advice.
Questions on this topic
From which tax year does the Income-tax Act, 2025 apply?
From the tax year 2026-27, which began on 1 April 2026. Returns for earlier years, including 2025-26, are under the Income-tax Act, 1961.
Do the tax slabs change under the new Act?
No. For the tax year 2026-27 the new regime slabs in the Act (nil up to ₹4 lakh, then 5% to 30%) and the rebate that makes tax nil up to ₹12 lakh of taxable income are the same as for 2025-26, and the Finance Act 2026 keeps the same old regime slabs.
What is Form 168?
It is the Annual Tax Statement and the AIS format under the new Act, replacing Form 26AS from the tax year 2026-27.
Do my old section numbers still work?
Not in the new Act. For example TDS on salary moves from section 192 to 392, and most other TDS sections go into section 393. Returns for years up to 2025-26 still use the old numbers.
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