The 1961 Act was famously sprawling. 819 numbered sections, 47 chapters, 14 schedules, and roughly 4,000 amendments accumulated across 65 years. Section numbers that ended in letters (Section 194IA, 194IB, 194IC, 194IIA). Sub-sections that ran to sub-sub-sub-clauses. Cross-references that required a colour-coded printout to follow. Practitioners who came to Indian direct tax after the 2000s learned the Act by memorising landmarks: Section 6 residence, Section 10 exemptions, Sections 15-17 salary, Section 22 house property, Sections 28-44 business, Section 45 capital gains, Sections 80C-80U deductions, Section 139 return, Section 143 assessment, Section 148 reassessment, Sections 192-194T TDS, Section 206C TCS, Section 44AA books, Section 44AB tax audit, Sections 245-269 offences.
The Income-tax Act 2025 keeps the substance of every one of those landmarks, but reorganises them into 536 numbered sections across 23 chapters plus 16 schedules [L2-C1]. Roughly 40 percent volume reduction. Not by cutting substance. By consolidating and simplifying language. This lesson walks the anatomy and hands you the mapping mindset that every practitioner needs during the transition period.
The 23 chapters at a glance
The chapter structure is not identical to the 1961 Act but reads recognisably to any practitioner. Approximate mapping:
| Chapter | Subject | Approx 1961-Act correspondence |
|---|---|---|
| I | Preliminary (short title, extent, commencement, definitions) | Chapter I of 1961 Act (Sections 1-3) |
| II | Basis of charge | Chapter II of 1961 Act (Sections 4-9A) |
| III | Incomes not included in total income | Chapter III of 1961 Act (Section 10, 10A, 10AA, 10B, 10BA, 10BB) |
| IV | Computation of total income under five heads (Salaries, House Property, Business & Profession, Capital Gains, Other Sources) | Chapter IV of 1961 Act (Sections 14-59) |
| V | Income of other persons included in assessee income | Chapter V of 1961 Act (Sections 60-65) |
| VI | Aggregation of income and set-off / carry forward of losses | Chapters VI + VI-A of 1961 Act (Sections 66-80 + 80A-80U) |
| VII | Deductions and rebates | Chapter VI-A of 1961 Act |
| VIII | Assessment (return, filing, computation, assessment procedure) | Chapter XIV of 1961 Act (Sections 139-158) |
| IX to XIV | Withholding, collection, refund, penalty, prosecution, appeals | Chapters XVII, XIX, XXI, XX of 1961 Act |
| XV to XX | Special provisions for specific assessee types (companies, MAT, NR, non-resident sportspersons, banks, trusts, cooperative societies) | Chapters XII, XII-A through XII-H of 1961 Act |
| XXI to XXIII | Miscellaneous, repeal and savings, savings and transitional | Chapters XXII-XXIII of 1961 Act plus new Section 536 |
VERIFY: exact chapter numbering and subject boundaries. The above table reflects the practitioner-community understanding of the chapter structure as of 6 September 2026 but requires cross-check against the ICAI-published bare Act text with tabular mapping.
The 16 schedules
Schedules under the new Act carry forward specific technical content that would clutter the section body. Approximate list (subject to VERIFY against bare Act text):
- First Schedule: rates of income-tax for individuals, HUFs, firms, LLPs, companies
- Second Schedule: procedure for recovery of tax
- Third Schedule: procedure for distraint and sale of movable property
- Fourth Schedule: recognised provident funds, superannuation funds, gratuity funds
- Fifth Schedule: list of articles or things (for Section 32 depreciation rate identification)
- Sixth Schedule: royalty on natural resources subject to Section 44BB
- Seventh Schedule: list of industries or activities
- Eighth Schedule: securities transaction tax
- Ninth Schedule: commodities transaction tax
- Tenth Schedule: computation of book profit for MAT
- Eleventh Schedule: articles not qualifying for deduction under Section 80IB
- Twelfth Schedule: processed minerals for deductions
- Thirteenth Schedule: articles for deductions under specified sections
- Fourteenth Schedule: list of areas classified as backward or hilly
- Fifteenth Schedule: transfer pricing methods
- Sixteenth Schedule: dispute resolution mechanisms
The 40 percent volume reduction: where the savings come from
The reduction from 819 sections to 536 is not evenly distributed. Concentration areas:
TDS consolidation: 60+ sections into one Section 393. This is the single largest saving. In the 1961 Act, TDS provisions ran from Section 192 (salary) through Section 194T (specified payment), with numerous letter-suffixed subsections (Section 194IA, 194IB, 194IC, 194IIA, etc). Each section had its own thresholds, exceptions, rate schedules, format for TDS return. Practitioners memorised 60+ sections. New Act consolidates all non-salary TDS into a single Section 393 with three structured tables (Table A residents, Table B non-residents, Table C any person). Each row contains payment type, threshold, rate. Salary TDS lives separately in Section 392.
Deletion of obsolete sections. Sections that dealt with tax holiday regimes that have long expired, or with legacy provisions superseded by later amendments, have been dropped from the new Act. Section 80IA and its sub-sections dealt with tax holidays for various infrastructure sectors and industrial undertakings; many of those tax holidays have expired and the corresponding provisions are no longer live. Section 10B (100 percent Export Oriented Undertakings) had a sunset that expired years ago. Section 32AC investment allowance had a sunset that ended in 2017. These provisions are not carried forward into the new Act, though for pending assessments under the 1961 Act they continue to apply via Section 536(2)(c).
Consolidation of related provisions. Multiple sections dealing with the same subject in the old Act have been merged into single sections in the new Act. Example: capital gains taxation clauses. Old Act had Section 45 (chargeability), Section 46 (dividend on distribution of assets), Section 47 (transactions not regarded as transfer), Section 48 (mode of computation), Section 49 (cost with reference to certain modes of acquisition), Section 50 (special provision for depreciable assets), Section 50A, 50AA, 50B, 50C, 50CA, 50D, Section 51 (advance money received), Section 54 through 54H (exemption on capital gains reinvestment). Corresponding new-Act structure consolidates related computation provisions into fewer sections while preserving substance.
The ICAI tabular mapping mindset
Every working practitioner keeps the ICAI tabular mapping open in one browser tab. Published by the ICAI Direct Taxes Committee as "Income-tax Act 2025 (Including Tabular Mapping of Sections vis-a-vis Income-tax Act 1961)," the mapping shows for every 1961-Act section (or sub-section, or clause) the corresponding location in the 2025 Act [L2-C2]. Bidirectional lookup: 1961 to 2025 (for translating a client query framed in old-Act terms) and 2025 to 1961 (for citing back to the well-known old-Act authority when advising on the new Act).
The mapping is not a substitute for reading the new Act text. Some mappings are one-to-one (Section 143 assessment procedure retains most of its structure in the new Act with the same or similar number). Some are many-to-one (60+ TDS sections all map to Section 393). Some are one-to-many (a single old-Act section may be split into multiple new-Act clauses for capital gains). Some are zero-to-many (new provisions in the 2025 Act with no direct 1961-Act analogue). The mapping tells you where to look; the Act text tells you what to conclude.
Practical guidance: print the mapping table or bookmark the ICAI PDF. Every time you draft an advisory note, response to a Show-Cause Notice, or client memo, cite the 2025-Act section and (in parenthesis) the 1961-Act correspondence via the mapping. Example: "TDS on rent to residents is now Section 393 Table A entry X (corresponding to Section 194I of the Income-tax Act 1961)." This helps clients who still think in old-Act terms and helps auditors and other reviewers who are also mid-transition.
Where the ICAI mapping breaks down
Three edge cases where the mapping is not enough.
Substantive changes. The Finance Act 2026 shift of buyback taxation from company-side (old Section 115QA) to shareholder-side capital gains (new-Act Clauses 67 and 197) is not a mapping question. It is a substantive change. The mapping shows you the section number correspondence; the substantive change tells you the tax incidence has moved from the company to the shareholder. Similarly for SGB secondary-market taxation, HRA 50 percent cities expansion, TCS LRS rate reduction. Substantive changes require reading the Finance Act 2026 amendments, not just the mapping.
Section 536 transitional continuations. Where the 1961 Act continues to apply to pending matters via Section 536(2)(c), you cite the old-Act section directly, not the new-Act mapping. Practitioners defending pre-1 April 2026 assessments continue to argue under old-Act sections; the mapping is for context, not for citation.
CBDT circulars that carry forward. Section 536(2)(j) preserves the validity of old-Act CBDT circulars unless in conflict with the 2025 Act. When you cite an old-Act circular, cite it as issued under the 1961 Act; do not attempt to re-cite the circular as if it were issued under the 2025 Act. The mapping does not cover circulars; it covers only the primary Act sections.
Practical workflow: how to draft a client advisory note under the new Act
Six-step workflow used by working practitioners:
- Identify the transaction and the 1961-Act sections you would have cited before 1 April 2026
- Look up the 2025-Act correspondence in the ICAI tabular mapping
- Read the 2025-Act section text (either from incometaxindia.gov.in or from the ICAI consolidated PDF)
- Check whether Finance Act 2026 amended the section (a substantive change may apply)
- Check whether the CBDT FAQ dated 20 March 2026 addresses your specific interplay question
- Draft the note citing the 2025-Act section, with parenthetical reference to the 1961-Act correspondence via the mapping
This workflow reduces the risk of citing an outdated section, missing a substantive Finance Act 2026 change, or misapplying an old-Act CBDT circular. Practitioners at Big Four firms have institutionalised this workflow via internal training programmes since March 2026.
Next lesson: the Finance Act 2026 and Rules 2026 layers on top of the assented Act text. What the 56 amendments changed, what the Rules 2026 replaced, and why practitioners work from the consolidated "as amended by Finance Act 2026" text rather than the bare assented Act.