If you've filed an Indian income tax return before, this year will feel different — not because the tax slabs changed overnight, but because the law underneath them did. The Income-tax Act, 2025 came into force on 1 April 2026, replacing the Income-tax Act, 1961 in its entirety. This is the first tax-filing season conducted under the new law, and it touches almost everything: the forms, the section numbers, the vocabulary, and a few genuine eligibility changes to ITR-1 and ITR-2. With the ITR-1/ITR-2 deadline landing on 31 July 2026, here's exactly what's different and what you need to check before you file.
Why the law was rewritten, not just amended
The 1961 Act had grown to 819 sections spread across 23 chapters after six decades of amendments, provisos, and cross-references. The Income-tax Act, 2025 restructures the same body of tax law into 536 sections within a revised set of 23 chapters — not a policy overhaul, but a genuine simplification of how the law is organised and numbered. The core tax principles you already know (heads of income, deductions, exemptions) carry over; what changed is where they live in the statute and what they're called.
| Old Act (1961) | New Act (2025) |
|---|---|
| 819 sections | 536 sections |
| "Previous year" + "Assessment year" | Single unified "Tax year" |
| Sec. 194C / 194J / 194I (TDS) | Secs. 392–394 + Numeric Payment Codes 1001–1067 |
| New tax regime default (Sec. 115BAC) | New tax regime default (Sec. 202) |
| Form 16 (salary TDS certificate) | Form 130 |
"Tax year" replaces "previous year" and "assessment year" — for good
This is the single change that will confuse the most people, because it's a vocabulary shift wrapped around a filing season you already understand intuitively. Under the 1961 Act, income earned between April 2025 and March 2026 was the "previous year," and you filed a return for it in the "assessment year" 2026-27. The new Act collapses that into one term: Tax Year 2025-26 refers to the income-earning period itself, and there's no separate "assessment year" label at all. Practically, when this article says "AY 2026-27," it means exactly what the new Act calls "Tax Year 2025-26" — same window, same deadline, new name. Expect your bank statements, Form 26AS, and payslips to gradually switch to "tax year" phrasing over the next couple of filing cycles.
Form 16 is now Form 130 — and it matters more than it sounds
If your employer's HR or payroll software issues you a document labelled "Form 16" for income earned in Tax Year 2026-27 (i.e., April 2026 onward), that document is, strictly speaking, using an outdated form name — the correct certificate under the new Act is Form 130. For the return you're filing right now (covering income earned before 1 April 2026), your existing Form 16 is still the correct document — this renaming only bites for salary income earned after the new Act took effect. If your payroll team hasn't updated its template by the time next year's TDS certificates go out, don't assume the document is wrong; assume the vendor is behind. Several other commonly used forms are being renamed or consolidated the same way, so treat any "Form" reference from a bank, employer, or deductor with a grain of caution until the new-Act naming settles across the industry. You can upload either version to InvestingPro's AI-powered Form 16 reader — it extracts the same six figures regardless of which label is printed on top.
TDS sections got consolidated — 194C, 194J, 194I are gone as section numbers
Under the 1961 Act, most professionals could rattle off a TDS section number from memory — 194C for contractors, 194J for professional fees, 194I for rent. The new Act retires these numbers entirely. TDS provisions are now consolidated under Sections 392, 393, and 394, with individual payment types identified by a new system of Numeric Payment Codes (1001–1067) rather than a unique section per payment type. If you're a freelancer or small-business owner who used to check "is this 194J or 194C" before deducting TDS on a vendor payment, you'll now be looking up a payment code instead of a section number. The underlying TDS rates for salary, rent, professional fees, and contractor payments have not changed — only the numbering and lookup mechanism have.
ITR-1 and ITR-4: you can now own two house properties, not just one
This is a real, substantive eligibility change, not just renumbering. For Tax Year 2025-26 (AY 2026-27), individuals who own up to two house properties can now file the simpler ITR-1 (Sahaj) or ITR-4 (Sugam) forms. Previously, owning a second house property forced you into the more detailed ITR-2 or ITR-3, even if every other part of your income was simple salary or presumptive business income. If you bought a second home or inherited one alongside your existing property, check your eligibility again this year — you may no longer need the longer form. Separately, retirement benefit accounts held in notified and non-notified foreign countries no longer need to be reported on ITR-1 and ITR-4, which mainly affects returning NRIs and people with legacy overseas retirement accounts.
ITR-2: the July 2024 capital-gains date-split is gone
If you filed ITR-2 last year, you'll remember the awkward requirement to split your capital gains into "before 23 July 2024" and "after 23 July 2024" buckets, because that mid-year date marked a change in LTCG/STCG rates from Budget 2024. For Tax Year 2025-26, that split is removed entirely — all capital gains for the full financial year are now reported under one consistent set of rates, since the entire year now falls after the rate change. This alone should meaningfully cut down the time it takes to fill Schedule CG for anyone with mutual fund redemptions, stock sales, or property transactions during the year. Run your own numbers through the capital gains tax calculator to see the STCG/LTCG split before you file — see our full stock market tax guide for how these rates apply to F&O and intraday income too.
ITR-4 presumptive filers: two new disclosure requirements
If you file under presumptive taxation using ITR-4, two things are now mandatory that were previously optional or absent: a new field under the Financial Particulars section of Schedule BP asking you to disclose investments, and a requirement to report your bank account balances as part of the return. Freelancers and small traders who've historically kept ITR-4 filing quick and light should budget a few extra minutes to pull these figures together before filing.
Every deadline for this filing season, in one place
| Filer type | Form | Due date |
|---|---|---|
| Salaried, one/two house properties, simple capital gains | ITR-1 / ITR-2 | 31 July 2026 |
| Business/profession, no audit required | ITR-3 / ITR-4 | 31 August 2026 |
| Business/profession, audit required | ITR-3 / ITR-4 | 31 October 2026 |
| Entities with transfer-pricing reports | ITR-6 and applicable | 30 November 2026 |
| Missed the due date (belated return) | Any, with late fee | 31 December 2026 |
| Need to revise an already-filed return | Revised return | 31 March 2027 |
Two of these are worth flagging specifically. First, the ITR-3/ITR-4 non-audit deadline of 31 August is now a permanent fixture under the Finance Act, 2026 — not a one-off extension like in past years, so don't expect it to snap back to 31 July next season. Second, the revised-return window has been extended from 31 December to 31 March 2027, giving you three extra months to correct an error in an already-filed return.
The new tax regime is still the default — now under Section 202
Nothing changes in substance here: the new (concessional) tax regime remains the default option for every taxpayer, and you must actively opt into the old regime with deductions and exemptions if that works out cheaper for you. The only change is procedural — this default is now codified under Section 202 of the new Act instead of the old Act's Section 115BAC. If you haven't compared old-vs-new regime numbers for this year's income, do that before you file rather than after — switching regimes after filing is more restrictive for salaried taxpayers than choosing correctly upfront. Run both scenarios on the old vs new regime calculator before you file, rather than guessing.
What to actually do this month
- Confirm which form you need using the two-house-property update above — you may qualify for a simpler form than last year.
- If you have capital gains, expect one clean calculation instead of a split — cross-check that your broker's or AMC's capital-gains statement isn't still using the old pre/post-July-2024 format.
- Don't panic if a document says "Form 130" instead of "Form 16," or cites a payment code instead of "194J" — both refer to the same underlying obligation under the new Act.
- File ITR-1/ITR-2 by 31 July 2026 if you're salaried — the extra month now only applies to ITR-3/ITR-4 non-audit filers, not to you.
See our existing step-by-step ITR filing guide and ITR-1 vs ITR-2 guide for the mechanics of filing itself — both are still accurate on process, this article covers what's new in the law underneath them. If your Form 16 (or Form 130) just landed, InvestingPro's AI Form 16 upload tool reads it and pre-fills these fields automatically.
Frequently Asked Questions
Do I need to refile anything I already submitted under the old Act?
No. Returns already filed for earlier tax years under the Income-tax Act, 1961 remain valid and are unaffected. The new Act governs income earned and returns filed from Tax Year 2025-26 (AY 2026-27) onward.
Is "Tax Year 2025-26" the same period as "FY 2025-26"?
Yes. The new Act's "tax year" terminology maps directly onto the financial year you already track — April 2025 to March 2026 — it simply removes the separate "assessment year" label that used to apply to the following filing year.
My employer still calls it Form 16 — is that a problem?
Not for this filing season. Form 16 issued for income earned before 1 April 2026 is still the correct document. The Form 130 renaming applies going forward, to TDS certificates for Tax Year 2026-27 salary income.
I own two houses — which form should I file now?
If your only other income is salary or simple capital gains, you can now file ITR-1 or ITR-4 with up to two house properties, instead of being pushed into ITR-2 or ITR-3 as in previous years.
Did the actual tax slabs or deduction limits change under the new Act?
No — this article covers structural and procedural changes (numbering, forms, terminology, eligibility). Slab rates and deduction limits are set separately by the annual Finance Act and are not affected by this restructuring.
What happens if I miss the 31 July deadline?
You can still file a belated return up to 31 December 2026, but you'll face a late-filing fee under Section 234F and lose the ability to carry forward certain losses. Filing on time remains the only way to avoid both.
Ready to file? Start with InvestingPro's ITR filing hub for the regime calculator, form chooser, and AI Form 16 reader — all updated for AY 2026-27.