Income Tax Act, 2025 Is Now in Force: One Transition Point Businesses Should Keep in Mind

The new Income Tax Act is now in force, but there is one transition point worth keeping straight.

The Income Tax Act, 2025 applies from 1 April 2026. The Income Tax Department has also confirmed that the Income-tax Act, 1961 stood repealed from that date.

That does not mean every filing, payment or proceeding dealt with after 1 April automatically falls under the new Act.

The useful way to look at the transition is by asking which period the matter relates to.

If a return, payment or proceeding relates to a tax year beginning before 1 April 2026, the old Act can still remain relevant. At the same time, requirements relating to Tax Year 2026–27 onwards move under the new Act.

A simple example is tax payment. The Department has clarified that payments for Tax Year 2026–27 onwards are to be made under the Income Tax Act, 2025, while payments relating to AY 2026–27 or earlier continue under the Income-tax Act, 1961.

So during this transition, the date on which something is being filed or paid is not enough on its own.

The more useful question is:

Which period does this compliance relate to?

That is worth checking before selecting a challan, form or compliance route on the portal.

Businesses may therefore find themselves dealing with the old and new Acts at the same time for different periods. That is expected during the transition; it does not, by itself, mean something has gone wrong.

This note reflects the position checked on 5 September 2026. For an actual filing, payment or proceeding, the current portal instructions and applicable provisions should still be checked before acting.