The current position

The current official position is that the Income-tax Act, 2025 is in force from 1 April 2026. Public materials issued by the Government describe the new Act as a restructuring and simplification exercise rather than a wholesale change in tax policy.

Why this matters

For clients and organisations, the practical point is that references to the older Income-tax Act, 1961 now need to be read with care. Depending on the issue, current materials may refer to the 2025 Act, to continuing provisions under the 1961 Act, or to amendments proposed through the Finance Bill, 2026.

What the official material indicates

  • The Press Information Bureau described the Income-tax Act, 2025 as effective from 1 April 2026.
  • The official explanatory memorandum to the Finance Bill, 2026 states that direct-tax proposals seek to amend both the Income-tax Act, 2025 and the Income-tax Act, 1961.
  • The same memorandum indicates that, for key rate provisions discussed there, no change was proposed in tax rates for the relevant 2026-27 period.
  • Government material also frames the Act as a simplification measure, including the introduction of the concept of a tax year.

What to watch carefully

Public summaries are useful for orientation, but they do not replace a close reading of the applicable statutory text, schedules, notifications, and transaction-specific facts. This is especially true where the matter involves structuring decisions, compliance deadlines, or interpretation questions.

Sources

Official materials referenced for this note include the Press Information Bureau background note on the Income-tax Act, 2025 and the memorandum explaining direct-tax proposals in the Finance Bill, 2026.

Press Information Bureau background note and Finance Bill, 2026 explanatory memorandum.