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Why this course exists: the 1 April 2026 regime change in one page

The Income-tax Act 1961 (65 years old, 4,000+ amendments, 819 sections) stood repealed on 1 April 2026. The Income-tax Act 2025 (536 sections, 23 chapters) took over. Then Finance Act 2026 added 56 amendments before the new Act was even in force. Then CBDT notified Rules 2026 plus the FAQ on Interplay and Transition on the same day. Then the Compulsory Scrutiny Guidelines landed on 4 June 2026. This lesson walks the moment before the moment and explains why every working CA and CFO in India needs a working grip on the new Act right now.

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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.

Here is the moment every Indian tax practitioner discovered the new Act the hard way. You are the Head of Tax at a mid-cap listed company. You have been running direct-tax compliance under the Income-tax Act 1961 for a decade. Your team knows Sections 192 through 194T for TDS. You know Section 45 for capital gains. You know Section 143 for assessment and Section 148 for reassessment. You have a Section 44AB tax audit calendar taped to your wall. Everything on your compliance calendar for FY 2025-26 references sections and subsections of the 1961 Act. You have a well-oiled machine.

On 1 April 2026, that Act stood repealed. Not amended. Repealed. And a new statute, the Income-tax Act 2025, took its place. Not a rewrite of a few chapters. A wholesale replacement of the 65-year-old law that has governed direct taxation in India since 1962. Every section number your team knows by heart is now a legacy reference. Section 192 salary TDS is now Section 392. Section 194J professional-fee TDS is now inside Section 393 Table A. Section 45 capital gains is now Clause 67. Section 143 assessment is now Section 143 equivalent under the new Act (yes, the number happens to be the same in this instance; most are not). Section 148 reassessment is renumbered. Every one of the 4,000 CBDT circulars issued under the 1961 Act now sits in a superposition state per Section 536(2)(j) of the new Act: valid unless in conflict with the 2025 Act.

This lesson is written for the moment before that moment. What actually changed on 1 April 2026, why it matters more than any Finance Act ever, and why every practitioner needs a working grip on the new Act right now, not in May 2027 when the CA Final syllabus catches up.

What changed on 1 April 2026, one paragraph

The Income-tax Act 2025 (Act No. 30 of 2025) was passed by Parliament on 12 August 2025 and received Presidential assent on 21 August 2025 [L1-C1]. It contains 536 sections across 23 chapters plus 16 schedules, replacing the Income-tax Act 1961 which had 819 sections, 47 chapters, 14 schedules and 4,000+ amendments accumulated over 65 years [L1-C2]. It came into force on 1 April 2026 for Tax Year 2026-27 onwards. Tax rates and slabs are unchanged. What has changed is the section structure, the language (simplified across the board), the consolidation of scattered provisions into fewer sections (60+ TDS sections into a single Section 393 with three tables), and the introduction of the unified Tax Year concept under Section 3 that replaces the dual Previous Year plus Assessment Year framework of the 1961 Act.

Then Finance Act 2026 landed. Finance Bill 2026 was presented by FM Nirmala Sitharaman on 1 February 2026 and enacted before the new Act came into force. It contains 56 income-tax amendments, some of which amend the still-in-force 1961 Act (for FY 2025-26 residual computations) and some of which amend the not-yet-in-force 2025 Act (for FY 2026-27 onwards). So the version of the Act that actually came into force on 1 April 2026 is the assented text as amended by Finance Act 2026. The consolidated text is published by the Income-tax Department at incometaxindia.gov.in [L1-C3].

Then on 20 March 2026, CBDT dropped two documents on the same day. First: the Income-tax Rules 2026, notified via CBDT Notification No. 22/2026, effective 1 April 2026, replacing the Income-tax Rules 1962 [L1-C4]. Second: the CBDT FAQ on Interplay and Transition to the Income-tax Act 2025, organised into 10 thematic areas covering general philosophy, tax payments and refunds, tax returns, statutory forms, reassessment, withholding tax, appeals and alternative dispute resolution, set-off and carry forward, non-resident provisions, and miscellaneous [L1-C5].

Then on 4 June 2026, CBDT issued the Compulsory Complete Scrutiny Guidelines for FY 2026-27 vide F.No.225/56/2026/ITA-II [L1-C6]. Every taxpayer above the compulsory-scrutiny thresholds now knows they will be picked.

That paragraph is the 1 April 2026 regime change in one page. Now the practitioner question: which parts touch you, and in what order?

Who this course is for

Nine distinct practitioner archetypes. The course serves each without pretending they are identical.

Practitioner typeWhat just changed for you
Chartered Accountant in independent practice or at Big Four / mid-tier / boutique firm (Deloitte, PwC, EY, KPMG, BDO, Grant Thornton, RSM, Nangia, ASA)Every client filing pack, every audit report, every Show-Cause response now needs new-Act section references. ICAI has published the tabular mapping; you need working fluency, not just recognition
Chief Financial Officer at a mid-large Indian company (Reliance, Tata, Infosys, TCS, HDFC, ICICI, Bharti Airtel, Jio, Adani group companies, listed and unlisted)Board presentations on tax must now reference the new Act; investor communications on ETR and provisions must reflect FY 2026-27 numbers; audit-committee questions on tax positions require new-Act citations
Head of Tax / Tax Manager at Indian corporates, MNCs, PE portfolio companies, family officesClient teams and business partners now expect new-Act framing on every advisory note; TDS master registers need Section 393 table mapping; TP documentation needs Rules 2026 alignment
In-house tax counsel at law firms with a tax practice (Trilegal, Cyril Amarchand Mangaldas, Nishith Desai, Khaitan, AZB, Shardul Amarchand, Lakshmikumaran and Sridharan)Every advisory memo, every opinion, every representation on client matters now needs new-Act citations; Section 536 transitional analysis on every pre-1 April 2026 assessment
Consultants at Big Four tax advisory + mid-tier firms building a new-Act practice lineClient onboarding decks and pitches now compete on new-Act depth; publications and thought-leadership expected on new-Act structural changes
CA Final students appearing from May 2027 exams onwardsYour ICAI syllabus is now the 2025 Act; practitioner-grade overlay on the ICAI study material is where you build differentiation
Founders of India-registered companies (private limited, LLP, OPC)External CA advice quality varies during the transition; a practitioner-grade grip on the new Act lets you brief your CA precisely and catch errors in filings
Compliance leads at fintech and edtech (Cleartax, Tax2win, Vakilsearch, KDK Software)Product surfaces, calculators, wizards, ITR autofill logic all need updating; practitioner content grip is competitive advantage
Adjacent domain-course completers (RBI Cyber, SEBI CSCRF, SEBI LODR, Companies Act, ESG BRSR)Your sector compliance now intersects with new-Act references; TDS on TIUE payments, capital gains on listed-entity buybacks, etc.

If your practice appears in that table, this course is written for you. If not, you may still benefit from the transitional-plumbing content in this module and the compliance-operations content in Module 8.

Why the 12 months matters

The migration is not open-ended. Every FY 2026-27 tax filing, every advance-tax computation, every TDS deposit, every Show-Cause response now generated by your office references the new Act. The compliance calendar for FY 2026-27 kicked off on 1 April 2026 and closes with belated ITR filings on 31 December 2026. Advance-tax first instalment was due 15 June 2026. Second instalment 15 September 2026. Salaried ITR filings closed 31 August 2026 (extended from 31 July 2026). Audit ITRs due 31 October 2026. Transfer-pricing ITRs due 30 November 2026.

Every working tax practitioner in India is currently learning the new statute on the job, in the middle of the busiest compliance window of the year. The academy courses that shipped before this one covered specific regulators (CERT-In, RBI, SEBI, IRDAI, DoT). This course covers the tax code itself. Bigger addressable audience. Higher urgency per practitioner. Same 12-to-18-month runway to build practitioner fluency.

Twelve to 18 months is the honest window to complete: (1) fluency on new-Act section structure with the ICAI tabular mapping, (2) working command of Section 536 transitional provisions for any matter that straddles 1 April 2026, (3) client-facing communication on Finance Act 2026 substantive changes (buyback shareholder shift, SGB secondary market taxation, TCS LRS reduction, HRA 50 percent cities expansion), (4) team retraining on Section 393 TDS consolidation, (5) update of internal templates and calculators, (6) refresh of audit and assurance workpapers. This course walks each of those workstreams module by module.

What this course does not do

Three honesty items before you commit to the course. First, it is not a fundamentals course on Indian income taxation. It assumes you already know what salary income is, how capital gains are computed, and what TDS does. If you are new to Indian direct tax entirely, start with an ICAI Direct Taxes bare-law programme or a CA foundation course. This course teaches the transition to the new Act, not the fundamentals from scratch. Second, it is not a substitute for a qualified CA in independent practice on your specific client facts. Every substantive claim is cited to a primary source, but a live filing needs a CA to sign off. Third, it is not an ICAI CA Final coaching class. If you are preparing for the CA Final exam, use ICAI study material plus a coaching class; this course is a practitioner overlay, not exam prep.

How to read the course

Module 1 (this module) is free preview. The other seven modules are paid. If you are on the fence, read all five lessons of Module 1 first. If the practitioner-type table above places you clearly, the paid modules pay back on your first FY 2026-27 client filing, your first Section 148 reassessment defence, your first faceless assessment response, or your first client conversation on the Finance Act 2026 buyback shareholder shift.

Next lesson: the Act anatomy and the 1961 to 2025 tabular mapping mindset. 536 sections. 23 chapters. 16 schedules. How to read the new Act with the ICAI mapping in your other hand.

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 ›

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Citations
Income-tax Act 2025, Act No. 30 of 2025 (assented 21 Aug 2025) (The Income-tax Act, 2025) L1-C1
The Income-tax Act 2025 (Act No. 30 of 2025). Bill passed by Parliament on 12 August 2025. Received Presidential assent on 21 August 2025 and was published in The Gazette of India Extraordinary the same day. Came into force on 1 April 2026 for Tax Year 2026-27 (Assessment Year 2027-28) 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 4,000+ amendments accumulated over 65 years). Modernises language, consolidates provisions, introduces the unified Tax Year concept replacing Previous Year + Assessment Year. Does not alter tax rates or slabs; existing STCG / LTCG / TDS / TCS rates carry forward.
Income-tax Act 2025, Section 1 Short title, extent, commencement (Commencement 1 April 2026) L1-C2
Section 1 provides the short title (Income-tax Act 2025), extends to the whole of India, and prescribes commencement on 1 April 2026 for Tax Year 2026-27 onwards. Income earned in FY 2025-26 (Tax Year prior to commencement) continues to be governed by the Income-tax Act 1961 read with Section 536(2)(c) of the new Act.
Finance Act 2026, Finance Act 2026 (56 IT amendments) (FA 2026 amendments to the new Act) L1-C3
Finance Act 2026 was enacted after Finance Bill 2026 was presented by FM Nirmala Sitharaman on 1 February 2026. 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 amendments: TCS on LRS for education / medical from 5 percent to 2 percent; TCS on overseas tour packages from up to 20 percent to 2 percent; reassessment notices for court findings must be issued within 3 months of end of quarter of order receipt; APA-modified income return-filing window of 3 months; HRA 50 percent cities expansion (4 new cities added); PAN quoting threshold revisions. The consolidated text of the Income-tax Act 2025 as amended by Finance Act 2026 is the current operative version.
Income-tax Rules 2026, CBDT Notification No. 22/2026 20 Mar 2026 (Rules 2026 in force 1 April 2026) L1-C4
The Income-tax Rules 2026 were notified by CBDT vide Notification No. 22/2026 dated 20 March 2026, with effect from 1 April 2026. Replaces the Income-tax Rules 1962 which had been in force for 64 years. Provides the procedural and operational framework for the new Income-tax Act 2025: ITR forms (ITR-1 to ITR-7), tax audit report forms (3CA / 3CB / 3CD), TDS return forms (24Q / 26Q / 27Q / 27EQ), TCS return forms (27EQ), form 15CA / 15CB for outward remittances, form 16 / 16A for TDS certificates, valuation methodologies, allowance exemption limits (including expanded HRA 50 percent cities), PAN quoting thresholds. VERIFY: exact G.S.R. number from the CBDT notification gazette page.
CBDT FAQ, Interplay and Transition FAQ 20 Mar 2026 (CBDT 10-thematic-area transition FAQ) L1-C5
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.
CBDT Circular, F.No.225/56/2026/ITA-II 4 June 2026 (Compulsory Complete Scrutiny FY 26-27) L1-C6
CBDT Compulsory Complete Scrutiny Guidelines for FY 2026-27 issued vide F.No.225/56/2026/ITA-II dated 4 June 2026. Prescribes parameters for compulsory selection of income-tax returns filed during FY 2025-26 for complete scrutiny in FY 2026-27. Categories include cases based on information from law enforcement or investigation agencies, cases involving addition during earlier assessment years, survey cases under Section 133A, search cases under Sections 132 / 132A, returns filed pursuant to notices under Section 148 (reassessment), tax evasion petitions with credible information, and specified international transactions above threshold. Selection typically communicated to assessee via Notice under Section 143(2) within 3 months of tax year end.
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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