New Income-tax Act from 2026

SNIPPET 1

Title: New Income-tax Act from 2026

What the law says:

A completely new Income-tax Act, 2025 replaces the old Income-tax Act, 1961. It applies to the whole of India and comes into force from 1 April 2026.

What it means for you from 01-04-2026:

From financial year 2026-27 onwards, all taxpayers—

* salaried persons,

* *business owners,

* professionals,

* senior citizens

* and investors—will be governed by this new law, not the 1961 Act.

The intention is simpler language, fewer sections, and easier compliance, not higher tax rates.

Example:

* Income earned during 1-4-2026 to 31-3-2027 will be taxed strictly as per the Income-tax Act, 2025, even though earlier years were governed by the 1961 Act. 

SNIPPET 2

Title: Goodbye "Assessment Year", Hello "Tax Year"

What the law says:

The confusing concepts of "Previous Year" and "Assessment Year" are removed.

A single term "Tax Year" is introduced, which normally means 12 months starting from 1 April.

What it means for you from 01-04-2026:

You no longer have to remember two different years for income and assessment.

Income is earned, taxed, and referred to in the same Tax Year, making understanding and filing returns easier.

Example:

Income earned from 1-4-2026 to 31-3-2027

➡️ Tax Year: 2026-27

➡️ Return filed for Tax Year 2026-27

(No separate "Assessment Year 2027-28" confusion anymore.) 

SNIPPET 3

Title: Tax Year Can Be Shorter Too

What the law says:

In some cases, a Tax Year may be shorter than 12 months, such as when a new business starts or a new income source begins during the year.

What it means for you from 01-04-2026:

If you start a business, profession, or new income mid-year, tax will apply only from that start date, not for the full year.

Example:

A freelance consultant starts work on 1-10-2026

➡️ Tax Year: 1-10-2026 to 31-3-2027 (6 months only)

➡️ Income before 1-10-2026 is not taxed as business income. 

SNIPPET 4

Title: Fewer Sections, Simpler Law

What the law says:

The new Act reduces sections from 800+ to about 536, removes outdated provisions, and uses tables and clear wording.

What it means for you from 01-04-2026:

You don't need to struggle with long explanations and multiple provisos.

Most exemptions, deductions and rates are now presented in tables, making them easier to understand.

Example:

Earlier: Multiple sections + explanations to understand exemptions

Now: One simple table listing who gets exemption and how much. 

Tax Awareness Initiative