Which Act applies to your income tax return depends on when your income was earned, not when you file. Income earned up to 31 March 2026 (FY 2025-26 and earlier) falls under the old Income-tax Act, 1961 — you file that return by 31 July 2026 (non-audit taxpayers), using the old section numbers, as AY 2026-27. Income earned from 1 April 2026 falls under the new Income-tax Act, 2025 — this is Tax Year 2026-27, filed in 2027 with the new section numbers. The section numbers have changed (for example, 80C is now Section 123), but the tax rates, slabs and deduction limits have not.
There is no missing year and no overlap — just one clean line at 31 March 2026.
The old Act used two terms: the Previous Year (when income was earned) and the Assessment Year (when it was assessed and filed). That "PY 2025-26 vs AY 2026-27" split is what made so many people select the wrong year on the portal. Section 3 of the new Act replaces both with a single Tax Year — the 12-month period from 1 April to 31 March, in which income is earned and filed under the same name. The first Tax Year is 2026-27.
Old Act vs new Act, at a glance:
The old Act's ~800+ sections have been consolidated into 536 sections across 23 chapters. The numbers you had memorised now have new ones, but the limits are unchanged:
This is renumbering and re-drafting — not a tax reform. Rates, slabs, deduction limits and rebates stay as notified in the applicable Finance Act. Need the new number for any old section? Use our Section Finder tool.
For your FY 2025-26 return being filed now: use the old 1961 Act section numbers. Your Form 16 for FY 2025-26 will also show the old sections — nothing needs to be "converted."
For businesses deducting TDS from 1 April 2026: transactions in Tax Year 2026-27 fall under the new Act (non-salary TDS is now under Section 393). Update your accounting/TDS software for FY 2026-27, or old section references in your 26Q/24Q can cause tax-credit mismatches and refund delays.
Also worth noting: the Income-tax Rules, 2026 bring new forms such as Form 168 (the new Form 26AS equivalent) and Form 121 (merged successor to Forms 15G and 15H), relevant from Tax Year 2026-27.
Section 536 repeals the old Act from 1 April 2026, but pending assessments, appeals, penalties and refunds under the old law continue under the old law. So a reassessment notice for, say, AY 2023-24 is still framed in 1961 Act language. Your rights and liabilities are not wiped out by the transition.
Do I need to change anything in my FY 2025-26 return now?
No — it is filed under the old 1961 Act, with the old section numbers.
What happened to Section 80C?
It is now Section 123. The ₹1.5 lakh limit and eligible investments are the same, and it remains old-regime only.
Did tax rates change?
No. This is a structural and drafting reform; rates and limits come from the applicable Finance Act.
From when do I use the new section numbers?
From Tax Year 2026-27 returns, filed in 2027. For now, use the old numbers.
Are "AY 2026-27" and "Tax Year 2026-27" the same?
No. AY 2026-27 = FY 2025-26 income (1961 Act). Tax Year 2026-27 = income from 1 April 2026 (2025 Act).
Still unsure which Act or section applies in your case? We can confirm it for you — get in touch.
Position as on July 2026. Section numbers are as per the Income-tax Act, 2025; due dates and forms can change by CBDT notification — please confirm before any filing. This is general information, not individual tax advice.
Every situation differs. Talk to us before you act on anything above.
This article is general information, not professional advice. Tax law changes frequently — please confirm your position with us before acting.