Act Explained
Income Tax Act 2025 Explained
The Income Tax Act 2025 replaced the 1961 Act on 1 April 2026. Here is what changed, what stays the same, and how the new regime works — in plain English.
The Income Tax Act 2025 is the law that decides how much income tax you pay in India. It replaced the 1961 Act on 1 April 2026. The words are simpler, the sections are fewer, and the new tax regime is the default. Everything below is taken from the Income Tax Department's own guidance.
What changed
In force since 1 April 2026
The Income Tax Act 2025 applies from tax year 2026-27 onwards. The 1961 Act stands repealed from the same date.
536 sections, 16 schedules
The earlier law had 819 sections and 14 schedules. The new Act is shorter, and it is written in plainer words.
New regime is the default
Section 202 of the new Act makes the new tax regime the default. An opt-out option is available to taxpayers.
One word: tax year
The new Act uses 'tax year' for the 12 months your income is counted over, instead of the older two-term wording.
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Sources
Sources: Income Tax Act 2025 · Income Tax Department, Objective and scope of the New Act (verified 2026-10-07). Last reviewed by FinWiz24 Research Desk.