The CBDT FAQ on Interplay and Transition (10 thematic areas) and the FY 2026-27 compliance calendar

The CBDT FAQ dated 20 March 2026 is organised into 10 thematic areas: general philosophy, tax payments and refunds, tax returns, statutory forms, reassessment, withholding tax, appeals and ADR, set-off and carry forward, non-resident provisions, and miscellaneous. This lesson walks the FAQ structure and closes with the FY 2026-27 compliance calendar every practitioner has taped to the wall.

Free preview 10 min read Verified

Legal basis

Income-tax Act 2025 primary-source stack current to 6 September 2026. Core: Income-tax Act 2025 (Act No. 30 of 2025), Bill passed by Parliament on 12 August 2025, received Presidential assent on 21 August 2025, published in the Gazette of India Extraordinary the same day, came into force on 1 April 2026 for Tax Year 2026-27 onwards. Contains 536 sections across 23 chapters plus 16 schedules; repeals the Income-tax Act 1961 (which had 819 sections across 47 chapters plus 14 schedules and accumulated over 4,000 amendments over 65 years). Consolidated text as amended by Finance Act 2026 available at incometaxindia.gov.in. Finance Act 2026 was enacted after Finance Bill 2026 was presented by Finance Minister Nirmala Sitharaman on 1 February 2026, and contains 56 income-tax amendments including amendments to both the still-in-force 1961 Act (for FY 2025-26) and the not-yet-in-force 2025 Act (for FY 2026-27 onwards). Key Finance Act 2026 amendments: TCS on Liberalised Remittance Scheme (LRS) for education / medical remittances reduced from 5 percent to 2 percent; TCS on overseas tour packages reduced from up to 20 percent to 2 percent; buyback proceeds shifted from company-side buyback tax to shareholder-side capital gains taxation; Sovereign Gold Bond capital-gains exemption on redemption narrowed to only primary-issuance subscribers (secondary-market buyers now taxable); reassessment notices to give effect to court findings must be issued within 3 months from end of quarter of court order receipt; Advance Pricing Agreement modified income return-filing window of 3 months post-agreement; HRA 50 percent cities expansion (4 new cities added: Bengaluru, Hyderabad, Ahmedabad, Pune per common practitioner sources subject to VERIFY against Rules 2026 gazette); PAN quoting threshold revisions. Income-tax Rules 2026 notified by CBDT Notification No. 22/2026 dated 20 March 2026, effective 1 April 2026, replacing the Income-tax Rules 1962. Rules 2026 prescribe ITR forms (ITR-1 through ITR-7), tax audit report on Form 3CA / 3CB / 3CD, TDS / TCS quarterly return forms (24Q / 26Q / 27Q / 27EQ), Form 15CA / 15CB for outward remittances, Form 16 / 16A for TDS certificates. CBDT FAQ on Interplay and Transition dated 20 March 2026 organised into 10 thematic areas: General philosophy underlying transition, Tax payments / collection / refunds, Tax returns, Statutory forms and procedural requirements, Reassessment proceedings, Withholding tax compliances, Appeals / revision / alternative dispute resolution, Set-off and carry forward of losses and deductions, Non-resident related provisions, and Other miscellaneous transitional issues. CBDT Compulsory Complete Scrutiny Guidelines for FY 2026-27 issued vide F.No.225/56/2026/ITA-II dated 4 June 2026. Key sections of the new Act frequently cited in this course: Section 1 (commencement 1 April 2026), Section 3 (Tax Year concept), Sections 5-7 (residence and scope), Clause 67 (capital gains definition), Clauses 196-198 (STCG / LTCG tax treatment split), Section 143 equivalent (assessment procedure), Sections 147 / 148 / 148A equivalents (reassessment framework), Section 246 equivalent (appeals to CIT(A)), Section 392 (salary TDS), Section 393 (consolidated TDS with Tables A / B / C), Section 394 (consolidated TCS), Section 536 (repeal and savings with 4 sub-sections and 22 sub-clauses). Landmark judgment integrated: Tiger Global International Holdings v Union of India (2026 INSC 60) decided by Supreme Court on 15 January 2026 on treaty abuse in Mauritius-Singapore-India indirect transfer transaction (applies via Section 536(2)(c) transitional carry-forward to pre-Apr-2026 matters governed by 1961 Act; foundational precedent for treaty-abuse arguments under both old and new Act). Foundational precedents continuing under Section 536(2)(c): Vodafone International Holdings BV v Union of India (SC 20 January 2012) on indirect transfer jurisdiction (basis for Section 9 explanation subsequently amended); Union of India v Ashish Agarwal (SC 4 May 2022) on old-to-new reassessment regime transition. ICAI publications integrated: Income-tax Act 2025 with Tabular Mapping of Sections vis-a-vis Income-tax Act 1961 (published by ICAI Direct Taxes Committee); ICAI outreach programs (38+ programs conducted between April 2025 and 2026); ICAI 90+ suggestions accepted in the final Act after being the first stakeholder invited by the Lok Sabha Select Committee on 6 March 2025. Cross-regulator: Companies Act 2013 Section 129 (financial statements) read with Section 44AB tax audit; DTAA network (India has active treaties with 90+ countries) plus MLI-embedded Principal Purpose Test; India-Mauritius DTAA amended 10 May 2016 for source-based capital gains taxation on post-1 April 2017 acquisitions; FEMA Section 3 (outward remittance) read with Section 394 TCS and Rules 2026 Form 15CA / 15CB; DPDP Act 2023 Section 8 (reasonable security safeguards) for CA firm client personal data handling. Items requiring ongoing verification and flagged inside the affected lessons: exact G.S.R. number of Income-tax Rules 2026 notification; exact 4 cities added to HRA 50 percent list per Finance Act 2026 (Bengaluru / Hyderabad / Ahmedabad / Pune per common practitioner sources); post-1 April 2026 CBDT circulars issued through 6 September 2026 (complete list); Tiger Global 2026 INSC 60 complete bench composition and case number.

The CBDT released the FAQ on Interplay and Transition to the Income-tax Act 2025 on 20 March 2026, the same day it notified the Income-tax Rules 2026 [L5-C1]. The FAQ is the operational bible for practitioners handling any matter that straddles the 1961 to 2025 transition. Organised into 10 thematic areas. This lesson walks the FAQ structure and closes with the FY 2026-27 compliance calendar.

The 10 thematic areas

Area 1: General philosophy underlying the transition

Covers the intent of the new Act, the design principle of preserving substantive tax outcomes while simplifying structure, the commitment that no new taxes are introduced by the new Act, and the assurance that pre-2025-Act assessments remain valid. Practitioner takeaway: the new Act is not a substantive tax reform; it is a structural simplification. Same rates, same slabs, same tax base. Different section numbers, different chapter organisation, different language.

Area 2: Tax payments, collection, and refunds

Covers advance-tax payments straddling the transition, TDS paid under the 1961 Act being creditable under the 2025 Act, refunds arising under the 1961 Act continuing to be payable, TAN and PAN continuity, and the treatment of tax deducted but not deposited at the time of transition. Practitioner takeaway: your existing PAN and TAN carry forward; no re-application. Refund cheques or online credits arising under the 1961 Act continue to be processed. Advance-tax paid for Tax Year 2025-26 (a transitional period) is creditable against the FY 2025-26 tax liability computed under the 1961 Act.

Area 3: Tax returns

Covers ITR filing for Tax Year 2025-26 (which straddles the transition; income earned prior to 1 April 2026 continues under the 1961 Act while income earned from 1 April 2026 onwards is under the 2025 Act, but the Tax Year 2025-26 return is filed under a single framework). Confirms no double ITR filing is required. Explains which ITR form applies for Tax Year 2025-26 vs Tax Year 2026-27. Practitioner takeaway: no double filing; one ITR per tax year, filed under the applicable Act.

Area 4: Statutory forms and procedural requirements

Covers the Rules 2026 form structure including ITR-1 through ITR-7, tax audit forms 3CA / 3CB / 3CD, TDS return forms 24Q / 26Q / 27Q, TCS return form 27EQ, outward remittance forms 15CA / 15CB, TDS certificate forms 16 / 16A. Explains form-availability timelines and interim form-usage rules during the transition (e.g. for late-filed ITRs relating to Tax Year 2024-25, the old ITR forms apply). Practitioner takeaway: check form-year applicability before filing; interim rules apply for late-filed returns.

Area 5: Reassessment proceedings

Covers the interplay between old-Act Section 148 / 148A reassessment provisions and the new-Act reassessment framework. Confirms that reassessment for pre-2025-Act tax years continues under the 1961 Act. Reassessment for Tax Year 2026-27 onwards follows the 2025-Act framework. Finance Act 2026 procedural timelines (3 months from end of quarter of court-order receipt) apply regardless of the tax year being reassessed. Practitioner takeaway: identify the tax year being reassessed to identify the substantive law; procedural rules at the time of notice issuance apply.

Area 6: Withholding tax compliances

Covers TDS deducted under the 1961 Act Section 194 series being deposited and reported after 1 April 2026 (procedural continuity), the interplay between old-Act TDS sections and Section 393 tables, TDS return filing under Rules 2026 forms (24Q / 26Q / 27Q). Confirms TAN continuity and quarterly return continuity. Practitioner takeaway: TDS deducted in March 2026 (under the 1961 Act) is deposited by 30 April 2026 and reported in the Form 26Q return for Q4 of FY 2025-26 (filed by 31 May 2026), under the same framework as always.

Area 7: Appeals, revision, and alternative dispute resolution

Covers pending appeals before CIT(A), ITAT, High Court, Supreme Court continuing under the 1961-Act framework per Section 536(2)(e). Explains new appeal filing options (under old-Act framework or under corresponding 2025-Act provisions) for pre-2025-Act tax years. DRP continuity for transfer pricing and non-resident cases. Vivad se Vishwas legacy settlements remain valid and their terms enforceable.

Area 8: Set-off and carry forward of losses and deductions

Covers business losses, unabsorbed depreciation, speculation losses, capital losses of pre-2025-Act tax years continuing to be available for set-off in Tax Year 2026-27 onwards, subject to the standard carry-forward limits measured from the original loss tax year. Chapter VI-A deductions claimed in pre-2025-Act years continue to apply. Practitioner takeaway: loss set-off and carry-forward mechanics are preserved; the Section 79 continuity-of-shareholding test for closely-held companies continues.

Area 9: Non-resident related provisions

Covers non-resident taxation continuity, DTAA application under both the old and new Acts, MLI PPT application, transfer pricing framework continuity, APA framework continuity with the Finance Act 2026 three-month post-agreement return-filing window. Withholding under Section 393 Table B for post-1 April 2026 remittances to non-residents. Practitioner takeaway: DTAA rates and mechanism are preserved; the new-Act framework does not alter treaty benefits.

Area 10: Other miscellaneous transitional issues

Covers residual scenarios not fitting Areas 1 through 9: legacy tax holidays and their sunset, retrospective amendments in the old Act (e.g. Vodafone amendment continuing to apply to pre-2012 transactions), specific industry-specific provisions (banks, insurance, shipping, mineral oil), and edge cases. Practitioner takeaway: check this Area for any client scenario that does not obviously fit Areas 1 through 9.

The FY 2026-27 compliance calendar

Every practitioner has the FY 2026-27 compliance calendar taped to the wall. Below is the working calendar under the 2025 Act read with Rules 2026 and the Finance Act 2026 amendments:

Q1 (April to June 2026)

7 April: TDS deposit for March 2026 deductions under the 1961 Act (last month of FY 2025-26 under old framework)
15 April: Q4 FY 2025-26 TDS return (Form 26Q) filing
30 April: TDS deposit for March 2026 deductions (extended timeline for last month of prior FY)
15 May: TCS return for Q4 FY 2025-26 (Form 27EQ)
31 May: Salary TDS return for Q4 FY 2025-26 (Form 24Q); TDS certificate to salaried employees (Form 16) issuance deadline
15 June: Advance tax first instalment (15 percent of estimated tax liability) for FY 2026-27
30 June: TDS return for Q1 FY 2026-27 (Form 26Q, filed via 27Q for non-residents)

Q2 (July to September 2026)

7 July: TDS deposit for June 2026 deductions
15 July: Form 15G / 15H for TDS-nil declarations
31 July: ITR filing deadline for salaried and non-audit taxpayers for AY 2026-27 (Tax Year 2025-26). This deadline was extended to 31 August 2026 per CBDT press release
7 August: TDS deposit for July 2026 deductions
31 August: Extended ITR filing deadline for salaried and non-audit taxpayers for AY 2026-27
15 September: Advance tax second instalment (45 percent cumulative) for FY 2026-27
30 September: TDS return for Q2 FY 2026-27

Q3 (October to December 2026)

7 October: TDS deposit for September 2026 deductions
31 October: ITR filing deadline for audit taxpayers for AY 2026-27; tax audit report Form 3CD filing
7 November: TDS deposit for October 2026 deductions
30 November: ITR filing deadline for transfer-pricing taxpayers for AY 2026-27; Form 3CEB TP report filing
15 December: Advance tax third instalment (75 percent cumulative) for FY 2026-27
31 December: Belated ITR filing deadline for AY 2026-27 (with late fee under Section 234F equivalent)

Q4 (January to March 2027)

7 January: TDS deposit for December 2026 deductions
15 January: TDS return for Q3 FY 2026-27
15 March: Advance tax fourth and final instalment (100 percent cumulative) for FY 2026-27
31 March: End of FY 2026-27 (Tax Year 2026-27); PAN-Aadhaar linkage checkpoint; other year-end compliances

End of Module 1

You now have the 1 April 2026 regime change in one page (Lesson 1), the Act anatomy and 1961 to 2025 mapping mindset (Lesson 2), the Finance Act 2026 and Rules 2026 layers (Lesson 3), Section 536 transitional plumbing (Lesson 4), and the CBDT FAQ 10 thematic areas plus the FY 2026-27 compliance calendar (this lesson).

Modules 2 through 8 walk each piece in operational detail. Module 2 covers basis of charge and income computation across the five heads. Module 3 covers the capital gains regime with the Finance Act 2026 buyback shareholder shift and SGB secondary-market taxation changes. Module 4 covers deductions, exemptions, set-off, carry-forward. Module 5 covers the Section 393 TDS consolidation and Section 394 TCS. Module 6 covers assessment, reassessment, appeals. Module 7 covers international tax, transfer pricing, non-resident provisions with the Tiger Global 2026 INSC 60 doctrine on treaty abuse. Module 8 covers compliance operations, ITR forms under Rules 2026, tax audit, and hands off all 12 templates.

If you have decided the course is right for you, the paid enrolment gate opens on the next screen. If you are still weighing it, Module 5 (Section 393 TDS consolidation) and Module 6 (assessment / reassessment defence) are the two most immediately actionable modules for most learners. Module 3 (capital gains post-Finance Act 2026) and Module 8 (compliance operations) are the modules learners return to most often as the FY 2026-27 filing calendar unfolds.

Every claim in this lesson is cited. Yellow markers like [L1-C1] are clickable. Click any to see the verbatim text of the Section, Rule or judgment we're relying on. Learn how we verify content ›

Preview complete You've read every free lesson in Module 1

Ready for the rest of Income-tax Act 2025 Practitioner Certification?

All 7 paid modules (35 lessons)
Complete citation register — every claim linked to the primary source
Final exam: 40 questions, unlimited retakes
Verifiable certificate with public verify URL and LinkedIn share
Founding-cohort badge on your certificate

Enrol for ₹9,999 ₹19,999 See full syllabus

Founding-cohort price. List: ₹19,999. Certificate on pass. LinkedIn-shareable. Lifetime access. Course updates included.

Citations

CBDT FAQ, Interplay and Transition FAQ 20 Mar 2026 (CBDT 10-thematic-area transition FAQ) L5-C1

The CBDT FAQ on Interplay and Transition to the Income-tax Act 2025 was released on 20 March 2026 alongside the Rules 2026 notification. Organised into 10 thematic areas: General philosophy underlying the transition, Tax payments / collection / refunds, Tax returns, Statutory forms and procedural requirements, Reassessment proceedings, Withholding tax compliances, Appeals / revision / alternative dispute resolution, Set-off and carry forward of losses and deductions, Non-resident related provisions, and Other miscellaneous transitional issues. The FAQ is the operational bible for practitioners handling any matter that straddles the 1961 to 2025 transition. Key clarifications: no double ITR filing required; old assessments remain valid; old CBDT circulars remain valid under Section 536(2)(j) unless in conflict.

Free preview

Reading Module 1. Enrol to unlock the rest of the course.

Module 1: The Income-tax Act 2025 in operation

Module 2: Basis of charge and income computation

Scope of total income and residential status under Sections 5-7
Salaries computation with expanded HRA 50 percent cities (Finance Act 2026)
House property annual value and deductions
Business and profession income Part 1: computation, deductions, disallowances
Business and profession income Part 2: presumptive taxation Sections 44AD, 44ADA, 44AE

Module 3: Capital gains regime under the new Act

Clause 67 capital gains definition and scope
STCG vs LTCG and Clauses 196-198 tax treatment split
Finance Act 2026 buyback shift: shareholder capital gains regime
Finance Act 2026 SGB change: primary issuance retains exemption, secondary market taxable
Slump sale, business transfer, amalgamations and demergers

Module 4: Deductions, exemptions, set-off, carry-forward

Chapter VI-A deductions under the new Act
Exemptions and allowances under Rules 2026 (including HRA expansion)
New vs old regime FY 2026-27 decision framework
Set-off of losses within and across heads (Sections 71-74A equivalents)
Carry-forward of unabsorbed losses and the Section 79 shareholding continuity test

Module 5: TDS Section 393 + TCS Section 394

Section 393 TDS consolidation: the three-table structure
Section 392 salary TDS: computation, regime choice, Form 24Q, Form 16
Four substantive TDS changes under the new Act
Section 394 TCS with Finance Act 2026 rate rationalisation
TDS / TCS compliance runbook: monthly deposit, quarterly returns, Form 16 issuance

Module 6: Assessment, reassessment, appeals

Faceless assessment continuation under the new Act
Regular assessment, scrutiny selection, and CBDT Guidelines 4 June 2026
Reassessment under the new Act with Finance Act 2026 procedural change
Appeals: CIT(A), ITAT, HC, SC and alternative dispute resolution
Assessment defence playbook: response templates for Section 143(2) and 148 notices

Module 7: International tax, transfer pricing, non-resident provisions

Non-resident taxation under the new Act (Sections 5, 9, 393 Table B)
DTAA network, treaty application, MLI Principal Purpose Test
Tiger Global 2026 INSC 60: SC on treaty abuse in indirect transfer
Transfer pricing framework under the new Act
Advance Pricing Agreements + Form 15CA/15CB with Finance Act 2026 3-month return window

Module 8: Compliance operations, ITR forms, playbook, templates handoff

ITR-1 through ITR-7 under Rules 2026
Tax audit under Section 44AB and Form 3CA / 3CB / 3CD
Advance tax and FY 2026-27 compliance calendar
PAN quoting threshold and PAN-Aadhaar linkage under Rules 2026
Templates handoff and course completion