The Income-tax Act 1961 (819 sections) is replaced by the Income Tax Act 2025 (536 sections, 23 chapters) from 1 April 2026. This is the auditor’s shortlist — the sections your reports, 3CD clauses and TDS work actually cite, verified pair by pair. FY 2025-26 filings still run on the 1961 Act; FY 2026-27 onwards cites the new numbers.
| 1961 Act | 2025 Act | Provision |
|---|---|---|
| 44AB | Sec 63 | Tax audit Thresholds and the specified-date mechanics carry over |
| 44AD | Sec 58 | Presumptive — business Merged with 44ADA into one presumptive provision |
| 44ADA | Sec 58 | Presumptive — profession Same consolidated section as 44AD |
| 10 | Schedules II–VII | Exempt incomes Moved out of the section body into Schedules |
| 24 | Sec 22 | House property deductions |
| 32 | Sec 33 | Depreciation |
| 37 | Sec 34 | General business expenditure |
| 43B | Sec 37 | Pay-to-claim items (incl. MSME 43B(h)) Note the trap: NEW Sec 37 = OLD 43B, while OLD 37 = NEW 34 |
| 45 | Sec 67 | Capital gains — charge |
| 54 | Sec 82 | Capital-gains exemption (residential house) |
| 80C | Sec 123 | LIC / PPF / ELSS deduction |
| 80D | Sec 126 | Health insurance deduction |
| 80G | Sec 133 | Donations |
| 87A | Sec 156 | Rebate |
| 112 | Sec 112 | LTCG (non-equity) One of the few numbers that survived unchanged |
| 115BAC | Sec 202 | New tax regime |
| 139 | Sec 263 | Return of income Old 263 (revision) readers: context changed completely |
| 192 | Sec 392 | TDS on salary |
| 194A–194T | Sec 393 | All non-salary TDS One serialized list with payment codes (e.g. 194C → code 1017) |
| 206AA | Sec 397(2) | No-PAN higher rate (20%) |
| 206C | Sec 394 | TCS |
| Form 24Q | Form 138 | Salary TDS return |
| Form 26Q | Form 140 | Non-salary domestic TDS return |
Only verified pairs are listed — this shortlist is checked against published concordances, and anything we haven’t verified stays out rather than guessed. For sections beyond the shortlist, the CBDT utility on the e-filing portal is the authority. Last verified 18 July 2026.
Three practical consequences. First, the season split: audits of FY 2025-26 (year ended 31 March 2026) still cite the 1961 Act; FY 2026-27 engagement letters, reports and opinions cite the 2025 Act. Second, the collision traps — new Sec 37 is old 43B while old Sec 37 becomes Sec 34, and Sec 263 now means the return of income, not revision — so a bare number without the Act year is ambiguous for the next few years; write “Sec 63 of the Income Tax Act 2025 (old Sec 44AB)” in anything a reader will rely on. Third, the TDS machinery: returns move to Form 138/140 and every non-salary deduction lives under Sec 393 with payment codes.
The Income Tax Act 2025 replaces the Income-tax Act 1961 from 1 April 2026. Six decades of amendments had grown the old Act to over 819 sections; the new Act consolidates to 536 sections in 23 chapters by absorbing provisos and explanations into main text, replacing narrative provisions with tables and formulas, and deleting spent provisions.
For practitioners the change is citational, not (mostly) substantive: thresholds, rates and mechanics largely carry over, but every reference in engagement letters, audit reports, tax opinions and software configurations must move to the new numbers for FY 2026-27 onwards — while FY 2025-26 assessments continue under the 1961 Act, so both citation systems run in parallel for years.
The highest-risk areas are the collisions: numbers that exist in both Acts with different meanings (Sec 37, Sec 263, Sec 156). The safe drafting convention during the transition is dual citation — new section first, old in brackets.
A firm signs the tax audit of a proprietorship for FY 2026-27 (AY 2027-28) in September 2027.
