When the Income-Tax Act, 2025 (ITA 2025) was passed by Parliament in February 2025, the tax community braced for a revolution. What arrived on 1 April 2026 — the Act’s effective date — was, in the government’s own words, a “rewrite, not a reform.” The structure changed. The language changed. The numbering changed. But for most taxpayers and practitioners, the substance — the rates, the exemptions, the deductions, the penalties — remained largely intact. Largely, but not entirely.
The Structural Changes: Sections Renumbered, Chapters Reorganised
The most disorienting change for practitioners is the complete renumbering of sections. Section 80C (the beloved ₹1.5 lakh deduction) is now Section 123. Section 10(38) (long-term capital gains on listed securities) has been consolidated into a restructured capital gains chapter. Section 139 (return filing) is now Section 263. Cross-references in agreements, loan documents, and legal notices referencing old section numbers remain valid by virtue of Section 536 of ITA 2025 (the savings clause), which deems references to the 1961 Act as references to the corresponding provision of the 2025 Act.
The CBDT has published an official concordance table mapping every section of the 1961 Act to its ITA 2025 equivalent. This table is the single most important document for any practitioner handling assessments spanning the transition year (AY 2026-27 onwards).
The Substantive Changes Worth Tracking
Despite the “no change” assurances, three substantive modifications took effect from 1 April 2026:
1. Unified Limitation Period for Reassessment. The patchwork of 3-year, 6-year, and 10-year reassessment windows under Sections 147-149 has been simplified. Under ITA 2025, the standard reassessment window is 3 years from the end of the relevant assessment year. A 5-year window applies where the escaped income exceeds ₹50 lakhs. The 10-year window (for cases involving foreign assets or serious fraud) is retained but requires prior approval from the Principal Chief Commissioner.
2. Rationalised TDS Provisions. The 2025 Act consolidates 35 separate TDS sections into a single chapter with a rate schedule. The rates are unchanged for most categories, but the threshold amounts have been standardised: the general threshold for TDS applicability (formerly ₹5,000, ₹10,000, ₹30,000 across different sections) is now uniformly ₹10,000 for most non-salary payments unless the schedule specifies otherwise.
3. Mandatory Electronic Filing for All Assessments. The 2025 Act for the first time embeds the principle of e-assessment as the default. Faceless assessment is no longer a scheme under Section 144B — it is the statutory norm, with physical hearings available only upon application and Commissioner approval.
Three Practical Takeaways
- Update all internal templates and document references. Board resolutions, loan agreements, compliance checklists, and employment contracts that cite 1961 Act sections must be updated to ITA 2025 references — or at minimum annotated with the concordance table mapping. Stale references will not create legal invalidity (the savings clause covers this), but they create confusion in disputes.
- Recalculate reassessment risk windows for open years. If you have clients with large transactions in AY 2023-24 or earlier that have not been assessed, verify whether the new 3-year or 5-year limits under ITA 2025 close the reassessment window sooner than expected.
- Re-train staff on the TDS threshold changes immediately. The uniform ₹10,000 threshold will cause both under-deductions (where teams assume old lower thresholds have been retained) and over-deductions (where teams apply new thresholds to categories with lower statutory limits). A desk review of your TDS payment policies before the first payroll and vendor payments of FY 2026-27 is essential.
Quick Quiz
Under the Income-Tax Act 2025, what is the maximum reassessment window for a domestic taxpayer where escaped income is ₹45 lakhs (no foreign assets involved)?
A) 3 years B) 5 years C) 6 years D) 10 years
Drop your answer below. We’ll publish the full analysis with the concordance table reference next week.