Library / Income-tax Act, 2025: The Professional's Master Guide

2. Transition: Frequently Asked Questions

These are the questions most often asked by clients and colleagues about the changeover from the 1961 Act. The answers apply the general principles explained in the previous chapters.

Do I need to learn a new tax law from scratch?

No. Most provisions are the same in substance. What changes is the numbering, the terminology (Tax Year), the structure (tables, schedules) and the forms. Focus on the mapping and on the few real changes, especially those made by the Finance Act 2026.

Which Act do I quote in a return filed in July 2026?

The 1961 Act, because the return is for income of FY 2025-26 (AY 2026-27). Quote sections such as 80C and 44AD, and use the forms under the 1962 Rules.

What happens to a loss of FY 2024-25?

It is carried forward and set off under the 2025 Act for its remaining period, following the rules of section 108 to 121.

Are old CBDT circulars still valid?

Circulars issued under the 1961 Act continue to be relevant to the extent the corresponding provision is unchanged, unless withdrawn. Check for new circulars issued under the 2025 Act, which may consolidate or replace them.

Are court decisions under the 1961 Act still relevant?

Yes, where the language and scheme of the provision are the same. Where the 2025 Act changes wording, the change must be examined before applying an older decision.

Will my PAN and TAN change?

No. PAN and TAN continue. Only the form numbers for applications have changed.

What about pending appeals and assessments?

They continue under the 1961 Act procedure. Orders, penalties and appeals for those years follow the old law, as saved by section 536.

How do I deduct TDS on a payment made on 2 April 2026 for an invoice of March 2026?

If the amount was credited to the vendor's account in March 2026, TDS was due under the 1961 Act at the time of credit. If it was not credited earlier and is paid in April 2026, TDS is under section 393 of the 2025 Act at the time of payment.

Do employers need to issue two Form 16s for the transition year?

For FY 2025-26, Form 16 under the old Rules is issued by June 2026. For Tax Year 2026-27, Form 130 is issued by June 2027. There is no overlap within a single year.

Where can I find the official mapping of sections?

The Income Tax Department provides a section mapping utility and the Act with a table of corresponding provisions on its website. Commercial databases also provide mapping tools.