CBDT Issues FAQs on Transition from Old Income Tax Act, 1961 to New Income Tax Act, 2025
- Parul Aggarwal
- Apr 7
- 3 min read
Central Board of Direct Taxes (CBDT) issues an official FAQ compendium to help taxpayers, professionals and tax officers navigate the shift from the Income-tax Act, 1961 to the newly enacted Income-tax Act, 2025. The new Act takes effect on April 01, 2026, replacing a law that had been in place for over six decades.
The document was prepared by the Directorate of Organisation and Management Services (DOMS) with inputs from professional bodies including ICAI, ICSI, CII, FICCI, ASSOCHAM, and PHDCCI.
What It Covers
The guide is organized into 10 thematic sections:
General Philosophy of Transition — Contains background on why the old Act was replaced, what changed structurally (536 sections vs. 819) and the key concept shift from “Assessment Year” to “Tax Year.”
Tax Payments, Collection & Refunds — How TDS, advance tax and self-assessment tax obligations carry over; which Act governs payments straddling the March–April 2026 boundary, treatment of MAT/AMT credits and outstanding tax arrears.
Filing Income Tax Returns — Contains which forms to use for AY 2026-27 vs. Tax Year 2026-27, deadlines, belated and updated return rules and how losses from FY 2025-26 can be carried forward.
Other Forms & Compliance Statements — Contains the mapping of old forms to new ones (For instance, captures the transition from Form 15G/15H to Form 121, from Form 3CA/3CB/3CD to Form 26, from Form 15CA/15CB to Form 145/146) and the changes in PAN/TAN application procedures.
Reassessment of Income Escaping Assessment — Contains the write up on which Act governs pending and fresh reassessment notices, the time limits under both laws and the approval hierarchies post-transition.
TDS Compliance — Contains the transition rules for deductors and deductees, quarterly return filing obligations under both Acts simultaneously, TDS certificate issuance timelines, handling of salary TDS across the March–April 2026 cutoff.
Appeals, Revision & Alternate Dispute Resolution — Pending appeals continue under the old Act, fresh appeals for pre-2026 years still governed by ITA 1961, Dispute Resolution Committee and Advance Ruling mechanisms retained.
Set-off & Carry Forward of Losses and Deductions — Losses validly determined under ITA 1961 carry forward seamlessly, profit-linked deductions (e.g., Section 80-IA) continue for remaining eligible years and condition violations applicable after April 1, 2026 taxed under the new Act.
NRI-Specific Issues — Residency tests for NRIs remains unchanged, contains overview of concessional NRI tax regime retained under new section numbers, claw-back provisions for exemptions claimed under old Act that are preserved.
Miscellaneous — Contains over of continuity of GAAR, APA validity, accounting method choices, rectification proceedings and the new default tax regime under Section 202 (replacing Section 115BAC).
Key Takeaway for Taxpayers
The core message throughout this FAQ document is continuity without disruption, to confirm on points like no new taxes, no lost rights and no need to re-file or re-register anything already done under the old law. Both Acts will run in parallel on the income tax e-filing portal during the transition period.
Disclaimer: This article is for general overview and guidance only and does not constitute a binding legal interpretation. Always verify the current statutory position before acting on this information. Income tax law is subject to frequent amendments and works in tandem with evolving judicial interpretations. Independent professional advice should be separately obtained for any specific client matter. Prime Accountants accepts no liability for decisions taken in reliance on this article without independent verification.
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