Income Tax Act 2025 Transition Checklist — CA Firm Format
Income Tax Act 2025 — Firm Transition Checklist
Firm: {{firm_name}} | Transition owner: {{transition_owner}} | Target completion: {{target_date}}
1. Purpose and Trigger
The Income-tax Act, 1961 stands repealed by Section 536(1) of the Income Tax Act, 2025 with effect from 1 April 2026. Income of tax year 2026-27 onwards is governed by the 2025 Act; income of FY 2025-26 and earlier years continues under the 1961 Act by virtue of the savings in Section 536(2). This checklist is the firm-level control sheet for the changeover: every item is signed off by the transition owner, and the completed sheet is retained as a practice-management working paper.
2. Engagement-Letter Re-papering
| Item | Status (Done / In progress / N/A) | Owner | Remarks |
|---|
| Inventory all engagement-letter templates that cite the Income-tax Act, 1961 or specific 1961-Act sections (e.g. 44AB, 92E, 139) | | | |
| Re-paper tax-audit engagement letters: scope now cites Sec 63 of the Income Tax Act, 2025 (old Sec 44AB) for tax year 2026-27 onwards | | | |
| Retain a 1961-Act variant of each letter for engagements relating to FY 2025-26 and earlier (belated / revised returns, assessments, appeals) | | | |
| Adopt dual citation in all letters during the transition years — new section first, old section in brackets | | | |
| Replace "previous year" / "assessment year" with "tax year" in letters governed by the 2025 Act | | | |
3. Software and Utility Updates
| Item | Status | Owner | Remarks |
|---|
| Confirm the tax-preparation software vendor has shipped the 2025-Act computation module for tax year 2026-27 | | | |
| Verify TDS software maps the old 194-series sections to the Sec 393 payment codes before the first quarterly filing of tax year 2026-27 | | | |
| Update return-form mappings: Form 24Q → Form 138, 26Q → 140, 27Q → 144, 27EQ → 143; certificates Form 16 → 130 and 16A → 131 | | | |
| Update document-management templates, report shells and standard schedules that hard-code 1961-Act section numbers | | | |
| Test one dummy filing per return type on the e-filing utility before the first live deadline | | | |
4. Pending-Proceedings Continuity (Section 536)
Under Section 536(2) of the Income Tax Act, 2025, assessments, reassessments, appeals, penalties and other proceedings for years up to FY 2025-26 (AY 2026-27) continue under the repealed 1961 Act. These files must NOT be migrated to the new citations.
| Item | Status | Owner | Remarks |
|---|
| Prepare a register of every open proceeding (scrutiny, appeal, rectification, penalty) with its assessment year and current forum | | | |
| Tag each open file "1961 Act — Sec 536 savings" so submissions continue to cite the old Act and old section numbers | | | |
| Diarise limitation dates for the last 1961-Act cycle (AY 2026-27) alongside the first 2025-Act cycle (tax year 2026-27) | | | |
| Note collision traps in the register: a bare "Sec 37" or "Sec 263" now means different things under the two Acts | | | |
5. Staff Training
| Item | Status | Owner | Remarks |
|---|
| Run a firm-wide session on the new Act structure (536 sections, 23 chapters) and the tax-year concept | | | |
| Circulate the firm's verified section-mapping shortlist (44AB → 63, 43B → 37, 194 series → 393, 139 → 263 and the rest of the firm's working set) | | | |
| Brief the TDS team on the three Sec 393 tables (residents / non-residents / any person) and payment codes | | | |
| Add a 2025-Act citation check to the review checklist for every deliverable issued after 1 April 2026 | | | |
6. Client Communication
| Item | Status | Owner | Remarks |
|---|
| Issue a client circular explaining the changeover date, the tax-year concept and the form renumbering (Form 16 → 130, 26AS → 168 and the TDS return forms) | | | |
| Write to TDS-deductor clients about the Sec 393 payment codes and the renumbered quarterly returns before the first filing of tax year 2026-27 | | | |
| Inform clients with open assessments / appeals that those matters continue under the 1961 Act (Sec 536) and nothing changes in those files | | | |
7. Working-Paper Conventions for the Dual-Act Years
- Dual citation: write the new section first with the old in brackets — "Sec 63 of the Income Tax Act, 2025 (old Sec 44AB)" — in every document a reader will rely on.
- Name the Act and year in every citation; a bare section number is ambiguous while both citation systems run in parallel.
- File naming: prefix working papers with the governing Act ("ITA2025" / "ITA1961") so reviewers can tell at a glance which law a file speaks.
- Terminology: "tax year" in all deliverables governed by the 2025 Act; "previous year" / "assessment year" only in 1961-Act files.
- Comparatives: a tax year 2026-27 file will carry FY 2025-26 comparatives prepared under the 1961 Act — cross-reference, do not restate citations.
8. Sign-off
All sections above reviewed and the open items carried to the firm's practice-management tracker.
For {{firm_name}}
Chartered Accountants
Firm Registration No.:
_______________________________
{{engagement_partner}} (Partner, Membership No. {{icai_membership_no}})
Transition owner: {{transition_owner}}
Date: 31 July 2026
