Income Tax Act 2025 vs 1961: The Complete Section Mapping Guide.

On 1 April 2026, the Income Tax Act, 1961 stood repealed. After 65 years and roughly 4,000 amendments, India's direct tax statute has been replaced by the Income Tax Act, 2025 — a leaner code with 536 sections, 23 chapters, and 16 schedules. The Income Tax Rules, 2026 came into force the same day.

If you are a Chartered Accountant, tax lawyer, GST practitioner, or in-house finance professional, this transition affects almost every working document in your practice — return filings, TDS challans, software section codes, client letters, notice templates, and ERP configurations.

This guide maps the key sections of the 1961 Act to their equivalents in the 2025 Act, explains the four structural changes that matter most for day-to-day practice, and tells you exactly what to update and what to leave alone.

What this guide covers

• The four structural changes you must understand before reading anything else

• "Tax Year" — the new term replacing "Previous Year" and "Assessment Year"

• Master section mapping table (most-referenced sections)

• The new TDS framework: how 40+ provisions became Section 393

• What stays under the old Act — pending assessments, appeals, and proceedings

• Practical update checklist for your practice

• FAQ: the questions practitioners are asking right now

1. The four structural changes that matter

Before drilling into individual sections, get the big picture right. Almost every confusion practitioners are reporting traces back to one of these four changes.

Change 1: From 819 sections to 536

The 1961 Act had grown to over 819 sections through six decades of amendments. The 2025 Act consolidates this into 536 sections across 23 chapters. The reduction came from three places: (a) explanations and provisos absorbed into the main text of sections, (b) tables and formulas replacing verbose narrative provisions, and (c) redundant or obsolete provisions removed entirely.

The Income Tax Rules have similarly shrunk from 511 rules with 399 forms to 333 rules with 190 forms.

Change 2: From two year concepts to one

The 1961 Act used two parallel year concepts — "Previous Year" (when income was earned) and "Assessment Year" (when it was taxed). This dual system caused decades of confusion, especially for new practitioners and clients.

The 2025 Act replaces both with a single concept: "Tax Year". A Tax Year is a 12-month financial year (1 April to 31 March). Income earned during Tax Year 2026-27 is assessed after that Tax Year ends — exactly as Previous Year income used to be assessed in the following Assessment Year. The mechanics are unchanged; only the naming has been simplified.

Change 3: TDS consolidation under Section 393

This is the change practitioners feel the most. Under the 1961 Act, TDS provisions were scattered across more than 40 sections — 192, 194A, 194B, 194C, 194H, 194I, 194J, 194-O, 194Q, 194S, and so on. Each section had its own threshold, rate, and exemption logic.

The 2025 Act collapses almost all of these into two parent sections. Section 392 covers TDS on salary (the old Section 192). Section 393 covers TDS on every other type of payment — contractors, professionals, rent, commission, e-commerce, virtual digital assets, and more — using a tabular structure with payment codes (1001 through 1067) to distinguish payment types.

Tax Collection at Source, formerly under Section 206C, now sits under Section 394.

Rates have not changed. The 1% TDS on contractor payments is still 1%. Professional fees TDS is still 10%. The change is administrative: when filing TDS returns, issuing TDS certificates, or making challan payments, you refer the new section and the appropriate payment code rather than the old standalone section number.

Change 4: Schedule II replaces Section 10

Section 10 of the 1961 Act — the catch-all home for exempt incomes — has been moved out of the main body of the Act into Schedule II of the 2025 Act. The exemptions themselves are largely preserved. Where you used to cite "Section 10(13A)" for HRA exemption, you will now cite the corresponding entry in Schedule II.

2. "Tax Year" explained — and how it interacts with the old Act

Section 3 of the 2025 Act establishes the Tax Year. The concept of tax year is in line with other countries of the world,however the period adopted may differ from contra to country. Section 536 — the repeal-and-savings section — handles the transition between ITA 1961 and ITA 2025

Three rules govern the transition:

• Income earned before 1 April 2026 is governed by the 1961 Act. Tax Year 2025-26 (which corresponds to Previous Year 2025-26 / Assessment Year 2026-27) continues to be assessed under the 1961 Act provisions, even though the assessment may happen after 01/4/2026.

• Income earned from 1 April 2026 onwards is governed by the 2025 Act. Tax Year 2026-27 is the first full tax year under the new Act.

• Pending assessments, appeals, and proceedings stay under the 1961 Act. If a scrutiny assessment, appeal, or revision relates to a period before 1 April 2026, it continues under the 1961 framework — including its appeal timelines and procedural rules. The 2025 Act does not apply retrospectively.

3. Master section mapping table

The table below covers the sections most frequently referenced in everyday CA practice. For exhaustive coverage of all 819 → 536 mappings, use a section mapper tool or refer to the official CBDT mapping utility.

4. The new TDS framework: every old section, where it went

Because TDS is the highest-volume compliance task in any practice, it deserves its own table. Section 393 organizes payment types into a serialized list with payment codes; the codes are what you select in updated TDS software when filing returns.

New forms you'll see

Alongside the new section numbers, the Income Tax Rules, 2026 have introduced new forms. Two to remember:

• Form 168 — the new equivalent of Form 26AS, covering Tax Year 2026-27 data.

• Form 121 — merged successor to the older Form 15G and Form 15H (declarations for non-deduction of TDS).

• Forms 130, 131, 138, 140, 141 — new TDS-related forms introduced under the 2026 Rules. Refer to the official notification for the specific use case of each.

5. What stays untouched

It's just as important to know what hasn't changed, so you don't over-correct.

• Tax slabs and rates — Finance Act 2025 slabs continue to apply, both for the old and new tax regimes.

• PAN, TAN, and faceless assessment infrastructure — unchanged. Existing PANs and TANs remain valid.

• Filing deadlines and ITR due dates — the dates in the calendar are the same.

• Audit thresholds — Section 44AB-style audit obligations continue under their renumbered equivalent.

• Refund mechanics — claimed automatically on filing the ITR. Belated filers can now claim TDS refunds, which is a small additional benefit under the 2025 Act.

• All circulars, notifications, and instructions issued under the 1961 Act — these continue to remain in force, provided they are not inconsistent with the 2025 Act provisions.

6. Practice update checklist

Concrete actions for your practice. Work through these in the first quarter of FY 2026-27:

Software & systems

• Update accounting software (Tally, Zoho, QuickBooks, Spectrum, etc.) with the new section codes for TDS

• Verify ERP TDS modules generate Form 24Q / 26Q / 27Q with new section numbers for post-April 2026 transactions

• Update internal section-reference tables, knowledge bases, and case management templates

Client communications

• Replace "Assessment Year" with "Tax Year" in client letters for FY 2026-27 onwards

• Update notice templates and reply formats with new section citations

• Brief tax teams and articles on the four structural changes before they touch FY 2026-27 work

Documentation

• Update partnership deeds, employment contracts, and service agreements that reference specific sections (e.g., "TDS deductible under Section 194J" should now read "TDS deductible under Section 393")

• Update standard show-cause notice replies and appeal templates

• Maintain a printed or PDF copy of the section mapping table for quick reference during client meetings

Compliance

• Continue using 1961 Act provisions for assessments, appeals, and proceedings relating to periods before 1 April 2026

• For TDS deducted on or after 1 April 2026, use new section codes on challans (mismatches will hold up deductee credits)

• Watch for CBDT circulars clarifying transition issues — several are expected during the year 2026

7. Frequently asked questions

These are the questions practitioners are searching for right now. Each answer is structured to be quoted by AI assistants and Google's FAQ rich results.

Q1. When did the Income Tax Act, 2025 came into force?

The Income Tax Act, 2025 came into force on 1 April 2026, simultaneously repealing the Income Tax Act, 1961. The Income Tax Rules, 2026 also came into force on the same date. The Act applies to income earned in Tax Year 2026-27 and onwards. Income earned before 1 April 2026 continues to be governed by the 1961 Act.

Q2. What is the new section number for Section 80C?

Section 80C of the 1961 Act corresponds to Section 123 of the 2025 Act. The deduction limit of ?1.5 lakh and the eligible investment categories (LIC premium, PPF, ELSS, etc.) remain unchanged. Only the section number has changed.

Q3. What replaced Section 10 in the 2025 Act?

Section 10 of the 1961 Act, which contained all major income exemptions, has been moved to Schedule II of the 2025 Act. The exemptions themselves are substantively preserved, including HRA, gratuity, leave encashment, and others. Citations should now reference the corresponding entry in Schedule II rather than Section 10 sub-clauses.

Q4. What is the difference between Tax Year and Assessment Year?

Under the Income Tax Act, 1961, "Previous Year" referred to the year in which income was earned and "Assessment Year" to the following year in which that income was assessed. The Income Tax Act, 2025 abolishes both terms and replaces them with a single concept: "Tax Year". A Tax Year is a 12-month financial year from 1 April to 31 March. Income of Tax Year 2026-27 is assessed after that Tax Year ends, exactly as Previous Year income was assessed in the Assessment Year under the old Act. The naming has been simplified; the underlying mechanics are unchanged.

Q5. Has Section 194C been removed under the new Act?

Section 194C of the 1961 Act has not been removed in substance. The TDS obligation on contractor payments has been consolidated into Section 393 of the 2025 Act, which now governs most non-salary TDS. When filing TDS returns for contractor payments made on or after 1 April 2026, deductors reference Section 393 along with the appropriate payment code rather than Section 194C. Rates and thresholds remain the same.

Q6. Do I file FY 2025-26 returns under the old Act or the new Act?

FY 2025-26 returns (Assessment Year 2026-27 under the old terminology) are filed under the Income Tax Act, 1961, even though the actual filing happens after 1 April 2026. The 2025 Act applies prospectively to income earned from 1 April 2026 onwards (Tax Year 2026-27). Pending assessments, appeals, and proceedings relating to periods before 1 April 2026 also continue under the 1961 Act.

Q7. Are tax slabs and rates different under the 2025 Act?

No. Tax slabs and rates are the same under the 2025 Act as they were under the Finance Act, 2025 — for both the old and new tax regimes. The basic exemption limit of ?12 lakh under the new regime, surcharge structure, and rebate provisions all continue unchanged. The 2025 Act is a structural and drafting reform, not a rate change.

Where to go next

This guide gives you the structural map. The detailed working depends on which sections of practice you handle most. Three suggestions:

• TDS-heavy practice? Bookmark Section 393 and the CBDT payment code list. Most filing errors in FY 2026-27 will trace back to wrong codes.
• Litigation-heavy practice? Watch for the first wave of judicial pronouncements interpreting the 2025 Act. The Taxonation case law digest tracks new judgements daily — including transitional disputes over Section 536.
• Corporate tax practice? Update internal policy documents, employment contracts, and standard form references. Most enterprise audits in 2027 will check for compliant section citations.

Taxonation maintains the most comprehensive India-focused library on the new Act — full text of all 536 sections, daily case law digests, plain-English explainers, and an old-to-new section mapper. Start a free trial to access the complete resource.

???????K.K. Singla (Advocate)

President Patiala Tax Bar Association

98140-93274

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