Income-tax Act 2025

The Income-tax Act, 2025 (Act No. 30 of 2025) is the statute that replaced the Income-tax Act, 1961 as the law governing direct taxation in India. It received Presidential assent on 21 August 2025 and came into force on 1 April 2026 under Section 1(3), which fixes commencement in the Act itself rather than leaving it to a notification. Section 536(1) repealed the 1961 Act on the same date. The 2025 Act governs Tax Year 2026-27 onward, so the financial year 2025-26, assessed in assessment year 2026-27 and filed in 2026, was the last year under the old statute.

The Act is a rewrite of the same law rather than a new tax, and the rates are the clearest illustration: slabs, surcharge, marginal relief and the health and education cess are imposed by the annual Finance Act, not by the Income-tax Act, so the change of statute moved no figure. The description sometimes offered, that the Act is a pure renumbering, is too strong. The rewrite abolished the entertainment allowance deduction, widened the test for a nil annual value on a self-occupied house, converted the retirement-benefit exemptions into deductions, and moved perquisite valuation out of the statute into the rules.

For a salaried employee or a pensioner the practical questions are narrow. Which Act governs which year, what the familiar sections are now called, whether any relief was lost, and which forms changed. This page answers each, and it dual-cites throughout: the 1961 provision that still governs any matter on a pre-2026 year, and the 2025 provision that governs from tax year 2026-27. Every section number here was located in the bare text of the Act as published by the Income Tax Department.

The Act as it stands is also not the text that received assent. The Finance Act, 2026 amended it through 95 clauses before it had run a single day, an Ordinance of 5 June 2026 amended Schedule IV with retrospective effect, and a further amending Bill passed both Houses in August 2026. For the computation itself, see income tax for government employees; for the regime choice, old versus new tax regime.

What the 2025 Act changed and what it left alone

The Income-tax Act, 2025 changed the architecture of the law and left the tax bill on a given income substantially where it was. Section numbers, drafting style, the placement of conditions in tables rather than provisos, and the removal of dead provisions all changed. The slab structure, the standard deduction, the Section 87A rebate and the exemptions a government employee relies on continued in substance.

Tax rates are not set by the Income-tax Act at all. They are set each year by the Finance Act that follows the Union Budget, and the transition year makes the division visible: the Finance Act, 2026 (Act No. 4 of 2026, assent 30 March 2026) carries two charging sections, Section 2 for the assessment year commencing 1 April 2026 under the 1961 Act and Section 3 for the tax year commencing 1 April 2026 under the 2025 Act, at the same figures. The Income-tax Act supplies the machinery, the definitions, the heads of income, the deductions and the procedure. The Finance Act supplies the numbers.

That division is why a person on the same income claiming the same deductions pays the same tax whether the computation is described under Section 115BAC of the 1961 Act or Section 202 of the 2025 Act. It is not, however, a licence to treat the Act as having changed nothing. The places where it changed the law are set out below under the heading on substantive changes, and one of them, the entertainment allowance deduction, removed a relief that a central government employee under the old tax regime could previously claim.

Enactment, from Bill No. 24 of 2025 to Act No. 30 of 2025

The Act reached the statute book through a Select Committee stage that rewrote it, which is why commentary from early 2025 cites clause numbers the final Act does not carry.

The Income-tax Bill, 2025 (Bill No. 24 of 2025) was introduced in the Lok Sabha on 13 February 2025, and the Minister of Finance and Corporate Affairs moved its reference to a Select Committee the same day. The Committee, chaired by Baijayant Panda, sat 36 times, received 334 memoranda, made a study visit to Bengaluru and Mumbai between 13 May 2025 and 17 May 2025, and completed clause-by-clause consideration on 7 July 2025. Its report, presented to the Lok Sabha on 21 July 2025 as SCITB 2025 No. 01, runs to 4,575 pages and carries 566 consolidated observations and recommendations, the last of them on the repeal and savings clause.

The government accepted the substance of that report rather than amending the Bill on the floor. It withdrew the original Bill on 8 August 2025 and introduced the Income-tax (No. 2) Bill, 2025 (Bill No. 104 of 2025) incorporating the changes. The Lok Sabha passed the revised Bill on 11 August 2025, the same day it was introduced, and the Rajya Sabha on 12 August 2025. Presidential assent followed on 21 August 2025.

A separate statute travelled alongside it and is often confused with it. The Taxation Laws (Amendment) Act, 2025, introduced as Bill No. 105 of 2025 and passed by the Rajya Sabha on 12 August 2025, amends the Income-tax Act, 1961 and the Finance Act, 2025, and touches the Income-tax Act, 2025 nowhere. Its clause 2 inserted Section 10(12AA) into the 1961 Act with effect from 1 April 2025, exempting a payment from the National Pension System Trust to a subscriber to the Unified Pension Scheme to the extent it does not exceed 60% of the individual corpus. The lump-sum exemption that scheme’s subscribers rely on therefore sits in the old Act, not the new one.

The tax year replaces the previous year and assessment year

Section 3(1) of the Income-tax Act, 2025 states the change in one line: for the purposes of this Act, “tax year” means the twelve months period of the financial year commencing on the 1st April. One label replaced two.

Under the 1961 Act, income earned in a financial year, called the previous year and defined at its Section 3, was taxed in the following financial year, called the assessment year, so the financial year 2025-26 was assessed in assessment year 2026-27. The two-year labelling was a persistent source of error on challans and return forms. Tax Year 2026-27 now means income earned between 1 April 2026 and 31 March 2027, with nothing else to track. Section 3(2) gives a shorter first tax year to a business, a profession or a source of income newly coming into existence mid-year, running from that date to the end of that financial year.

The abolition is complete rather than cosmetic. The phrase “assessment year” appears nowhere in the Income-tax Act, 2025. “Previous year” survives exactly once, at Section 536(3), and only as a rule of construction: a reference in the 2025 Act to a tax year commencing on 1 April 2025 or earlier is to be read as a reference to the corresponding previous year under the repealed Act. The drafters kept one backward-looking hook and removed the term everywhere else.

For a salaried employee the effect is a simplification of labelling and nothing more. The tax year is the financial year, and there is no separate assessment year.

Which year is governed by which Act

The cut is clean at 1 April 2026, and the governing Act follows the year the income was earned, not the year the return is filed.

No return for the financial year 2025-26 is under the 2025 Act, whenever it is filed. The 1961 Act governs that year in full, including the Section 89 relief on Form 10E, the Section 87A rebate and Section 115BAC, and Section 536(2)(c) keeps it applying to a belated return, a revised return, a reassessment, a rectification, a penalty or an appeal on that year even though the Act itself stands repealed. The Income-tax Act, 2025 first bites on income earned from 1 April 2026, which is filed in 2027 on the income tax slabs for AY 2027-28.

Section 536, the repeal of the 1961 Act and the savings that follow

Section 536(1) repealed the Income-tax Act, 1961 outright, and Section 536(2) then saved almost everything done under it, across clauses (a) to (v). The savings are what stop a change of statute from disturbing an open matter.

Clause (a) protects the previous operation of the repealed Act and anything duly done or suffered under it, and clause (b) protects any right, privilege, obligation or liability already acquired, accrued or incurred. Clause (c) is the one a taxpayer feels: the repealed Act continues to apply to any proceeding pending on 1 April 2026 and to any proceeding initiated on or after that date in respect of a tax year beginning before it, expressly including notices, assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeals, all carried out under the old Act’s procedure. Clause (d) allows penalty proceedings for a pre-2026 year to be initiated and imposed under the repealed Act as if the 2025 Act had not been enacted, and clause (e) carries a pending application, appeal, reference or revision before an income-tax authority, the Appellate Tribunal or a court through to disposal on the same footing.

Clause (f) matters most to a salaried employee. Any election or declaration made, or option exercised, under the 1961 Act and in force immediately before 1 April 2026 is deemed to have been made under the corresponding provision of the 2025 Act, so an employee who had already opted out of the new regime does not repeat the exercise because the statute changed. Clause (j) does the same work for administrative material: an agreement, appointment, approval, recognition, circular, direction, instruction, notification, order, rule or scheme issued under the 1961 Act continues in force under the corresponding provision of the 2025 Act so far as it is not inconsistent with it. Six decades of CBDT circulars did not lapse on 1 April 2026.

Three clauses were rewritten before they ever operated. The Finance Act, 2026 substituted clause (g), on interest where a refund falls due or a default occurs on or after 1 April 2026 in a pre-2026 matter, which now applies the repealed Act’s interest provisions at the rate specified in the corresponding provision of the 2025 Act; clause (h), on a sum earlier allowed as a deduction and later clawed back, which is now taxed under the same head of income it would have fallen under before; and clause (l), which maps Section 115JAA and Section 115JD credits to Section 206(3) and 206(4). Clause (m) carries brought-forward losses across by a table naming the repealed sections, including Section 71B for house property and Section 72 for business losses, to be set off in the manner provided in the repealed Act. Clause (v) preserves the old Act for proceedings connected to a search under Section 132 or a requisition under Section 132A initiated before commencement. Section 536(4) then applies Section 6 of the General Clauses Act, 1897 on top of the whole scheme, so anything the express savings miss is caught by the general rule.

In practice a government employee with a refund pending for the financial year 2024-25, or an appeal on an old assessment, does nothing differently. Those follow the old Act to their conclusion, and the permanent account number, the tax deduction account number and the deductor machinery carry across, so an employer’s TDS on salary and an employee’s Form 26AS credits were not disturbed.

Section 535, the power to remove difficulties, and its 1 April 2029 sunset

Section 535(1) lets the Central Government make an order, general or special, to remove a difficulty in giving effect to the Act, provided the order is not inconsistent with the Act. It is the transition valve, and it is time-limited.

Section 535(2) allows such an order to provide for adaptations or modifications subject to which the 1961 Act applies to assessments for the tax year ending 31 March 2026 or earlier, which is how a defect in the interaction between the two statutes would be repaired without fresh legislation. Section 535(3) is the sunset: no order under sub-section (1) may be made after the expiry of three years from 1 April 2026, so the power lapses on 1 April 2029. Section 535(4) requires every order made under it to be laid before each House of Parliament.

The three-year limit is the reason the transition problems that surface will surface early. After 1 April 2029 a defect in the changeover needs an amending Act, not an executive order.

Amendments to the Income-tax Act, 2025 since assent

The Act has been amended three times since it received assent on 21 August 2025, and the largest of those amendments took effect on the same day the Act itself commenced.

The Finance Act, 2026 (Act No. 4 of 2026, assent 30 March 2026) devotes clauses 35 to 129 of Chapter III, Part B to the Income-tax Act, 2025, amending it through 95 clauses with effect from 1 April 2026. The sections touched include 2, 7, 21, 22, 29, 58, 66, 69, 70, 93, 99, 140, 147, 149, 150, 162, 195, 202, 203, 204, 206, 262, 263, 266, 267, 393, 394, 395, 397, 399, 400, 402, 522 and 536, along with Schedules III, IV, VI, VII, XI, XII and XIV, and it inserted an entirely new Section 354A. One insertion runs on a different clock: Section 393(6)(b), on the electronic furnishing of a no-deduction declaration to a depository, takes effect from 1 April 2027, which is what the words “save as otherwise provided in this Act” in Section 1(3) are there to accommodate.

An Income-tax (Amendment) Ordinance promulgated on 5 June 2026 under article 123(1) of the Constitution, Parliament not being in session, inserted serials 13D and 13E into Schedule IV with retrospective effect from 1 April 2026, exempting interest and capital gains on Government securities for foreign institutional investors and the Bank for International Settlements, with a new Note 4 defining the terms. A Taxation and Other Laws (Amendment) Bill, 2026 was introduced in the Lok Sabha on 4 August 2026 and passed by the Lok Sabha on 6 August 2026 and the Rajya Sabha on 10 August 2026, replacing that Ordinance while saving what was done under it and further amending the 2025 Act.

None of the three changed a salaried computation. The point for a reader citing the Act is narrower and practical: the text to consult is the amended text, and a copy of the Act as passed in August 2025 is already out of date on Sections 21, 22, 93, 202 and 536, among others.

The scale of the rewrite in the government’s own figures

The Ministry of Finance placed a like-for-like comparison before Parliament, reproduced at paragraph 1.16(a) of the Select Committee report, and it is the authoritative measure of what the rewrite did to the volume of the law.

The 819 figure needs one qualification to be read correctly. It counts sections actually in force in the 1961 Act, including the lettered insertions that six decades of amendment produced, such as 80-IA, 115BAC and 194-IA, against a nominal numbering that ended at Section 298. The 2025 Act’s 536 sections run from Section 1 to Section 536 with no lettered insertions as enacted, which is the whole point of renumbering, though the Finance Act, 2026 has already added Section 354A.

Paragraph 1.16(b) of the same report records that all provisos, about 1,200 of them, and all explanations, about 900, were removed, their conditions rewritten into the tables and formulae the count above shows growing. Paragraph 1.20 records that roughly 90 redundant sections and sub-sections, three entire chapters and one schedule were dropped as dead law, including fringe benefits tax, the Section 10A free trade zone relief and the Section 10(33) transitional exemption for the Unit Scheme 1964. The gain is legibility: a conditional rule that once required chasing three provisos and an explanation across a section can now be read from a single table.

Section mapping for salaried employees and pensioners

The sections a government employee cites by number moved, and the table below maps the familiar 1961 provisions to their 2025 counterparts. Each row was read in the bare text of the Act as published by the Income Tax Department rather than taken from a commentary.

The house rent allowance exemption is the row most often mis-cited, because it moved out of the Section 10 list entirely. The correct citation is Section 11 read with Schedule III, Table serial 11, with the least-of-three computation set out in Rule 279 of the Income-tax Rules, 2026, and the detail is at HRA exemption under Section 10(13A). The regime, the rebate and the relief carry over unchanged; the two rows to read carefully are the entertainment allowance, which was abolished, and the self-occupied annual value, which was widened.

Where the 2025 Act changed the law rather than the numbering

Five changes in the 2025 Act go beyond renumbering, and three of them reach a central government employee directly.

The entertainment allowance deduction was abolished. Section 16(ii) of the 1961 Act allowed a government employee under the old regime the least of Rs. 5,000, one-fifth of salary, or the entertainment allowance actually received. The Table in Section 19(1) of the 2025 Act carries no equivalent serial. This is a deduction lost rather than moved, and the standard deduction page sets out how it interacted with the rest of Section 16 while it lasted.

The annual value of a self-occupied house is easier to bring to nil. Section 23(2) of the 1961 Act allowed nil annual value where the owner occupied the house, or could not occupy it owing to employment, business or profession carried on at another place, and had to reside elsewhere in a building not belonging to him. Section 21(6) of the 2025 Act allows it where the owner occupies the house for his own residence or cannot actually occupy it due to any reason, for up to two houses, and Section 21(7) withdraws it if the house is let at any time in the tax year or the owner derives any other benefit from it. For an employee posted away from an owned house, “any reason” is a materially wider test than the employment condition it replaced. The Rs. 2,00,000 and Rs. 30,000 interest limits at Section 22(2) and the 30% standard deduction on annual value at Section 22(1)(a) are unchanged.

Retirement benefits became deductions instead of exemptions. Gratuity, commuted pension, leave encashment and voluntary retirement compensation sat in Section 10(10), 10(10A), 10(10AA) and 10(10C) of the 1961 Act as exemptions. The 2025 Act moved them into the Table in Section 19(1) as deductions from salary: serial 3 for death-cum-retirement gratuity, serial 4 for defence retiring gratuity, serial 5 for gratuity under the Payment of Gratuity Act, serial 7 for commutation under the Civil Pensions (Commutation) Rules, serial 8 for commuted pension under any other scheme, serial 10 for retrenchment compensation, serial 12 for voluntary retirement and serial 13 for leave encashment. The Select Committee described the consolidation as building a self-contained code for salaried employees. The amount relieved is preserved and serials 3 and 7 relieve the whole of it for a government employee, so the outcome is unchanged even though the route is not.

Perquisite valuation moved from the Act into the Rules. Paragraph 1.19 of the Select Committee report records that the valuation of perquisites, with its conditions and exceptions, was moved to the Rules, and that the salary limit for the non-taxability of perquisites is now prescribed by rule. A threshold that was previously in primary legislation can now be revised by notification.

Deductions against dividend income were closed off. Section 93(2), as substituted by the Finance Act, 2026, allows no deduction at all against dividend income, income from units of a Mutual Fund under Schedule VII serial 20 or 21, or income from units of a specified company under the UTI Repeal Act, overriding Section 93(1).

What a central government employee pays under the 2025 Act

The figures are unchanged across the transition because they come from the Finance Act. Under Section 202(1) of the 2025 Act, read with Part I-B of the First Schedule to the Finance Act, 2026, the new regime charges nil up to Rs. 4 lakh, 5% from Rs. 4 lakh to Rs. 8 lakh, 10% from Rs. 8 lakh to Rs. 12 lakh, 15% from Rs. 12 lakh to Rs. 16 lakh, 20% from Rs. 16 lakh to Rs. 20 lakh, 25% from Rs. 20 lakh to Rs. 24 lakh, and 30% above Rs. 24 lakh, with a 4% health and education cess on the tax. Section 2(6) of the Finance Act, 2026 charged that cess for the assessment year commencing 1 April 2026 under the 1961 Act and Section 3(15) charges it for the tax year commencing 1 April 2026 under the 2025 Act, at 4% in both, which is why the change of Act left it untouched.

The reliefs at the lower end continue. The Section 87A rebate, now Section 156, leaves a resident individual’s income up to Rs. 12 lakh untaxed under the new regime, or Rs. 12.75 lakh for a salaried employee after the Rs. 75,000 standard deduction, with marginal relief just above Rs. 12 lakh and no rebate against income taxed at special rates such as capital gains.

The government-employee specifics survived intact. The standard deduction is Rs. 75,000 under the new regime and Rs. 50,000 under the old, at serial 2 of the Section 19(1) Table. The employer’s National Pension System contribution of 14% of basic pay plus dearness allowance is deductible under Section 124(1) and 124(2) even in the new regime. The family pension deduction under Section 93(1)(d) is one-third or Rs. 25,000, whichever is less, where tax is computed under Section 202(1), and one-third or Rs. 15,000 otherwise. Gratuity, commuted pension and leave encashment remain fully relieved for a government employee. One quantum did move under the new framework: the transport allowance for an employee with a specified disability rose from Rs. 3,200 a month to Rs. 15,000 in the metropolitan cities and Rs. 8,000 elsewhere under rule 15 of the Income-tax Rules, 2026. The income tax calculator applies these figures to a specific salary, and deductions allowed in the new tax regime lists the six that survive.

Forms renumbered by the Income-tax Rules, 2026

The Income-tax Rules, 2026, made under Section 533 of the Act and in force from 1 April 2026, renumbered every form a salaried employee touches. The numbers below are notified, not proposed, and each applies from tax year 2026-27, so the certificates and statements for the financial year 2025-26 stay on the old numbers.

Arrears relief is the change most likely to reach a government employee, because a dearness allowance revision or a pay-fixation order routinely pays out for an earlier period. Rule 73 of the 2026 Rules, headed relief under section 157(1) when salary is paid in arrears or in advance, gratuity and so on, prescribes Form 39 and covers the same field as Rule 21AA did: additional salary, family pension, gratuity, retrenchment compensation and commutation of pension. For the financial year 2025-26 return, including a belated or revised one, the claim is still Form 10E under Section 89 of the 1961 Act, and the how to fill Form 10E guide covers that process. Form 16 becomes Form 130, prescribed for the certificate required by Section 395(4), and Form 26AS becomes Form 168 under Rule 245, which merges the tax credit statement with the annual information statement now required by Section 510.

Pensioners under the 2025 Act

A pensioner’s tax bill did not change, but two provisions did, and one of them is new relief rather than a renumbering.

Monthly pension is taxed under the head Salaries, so a pensioner claims the same standard deduction as a serving employee, Rs. 75,000 under the new regime or Rs. 50,000 under the old, at serial 2 of the Section 19(1) Table. A family pension received by a dependant is taxed under Income from Other Sources with its own deduction at Section 93(1)(d), one-third or Rs. 25,000 whichever is less under the new regime and one-third or Rs. 15,000 under the old. The Finance Act, 2026 amended Section 93(1)(a) and Section 93(2) but left Section 93(1)(d) alone.

The commuted portion of pension remains fully relieved for a government pensioner, though by a different mechanism: serial 7 of the Section 19(1) Table allows the entire amount commuted under the Civil Pensions (Commutation) Rules as a deduction, where Section 10(10A)(i) of the 1961 Act exempted it. Dearness relief tracks the pension as before and is taxed with it.

Disability pension gained a statutory exemption it never had. The Finance Act, 2026 inserted serial 38A into Schedule III, covering disability pension including both the service element and the disability element, for a member of the armed forces including the paramilitary forces who was invalided out of service on account of bodily disability attributable to or aggravated by that service and did not retire on superannuation. Note 12 to the Schedule provides that serial 38A applies only from a date the Central Government notifies, and that pending that notification the entire disability pension of a disabled officer of the Indian armed forces is exempt from income-tax. The relief previously rested on CBDT instructions rather than the statute, and the two conditions in serial 38A are narrower than the pending-notification default, so the notified date will matter. Schedule III also preserves serial 14 for gallantry-award pensions and serials 15 and 16 for the family pension of armed forces personnel killed in action. The rest of the position is at income tax for pensioners.

What the transition asks of a salaried taxpayer

Almost nothing, and the reason is Section 536(2)(f). An existing regime election carries over by deeming, an existing permanent account number and tax deduction account number carry over, and a pending refund or appeal follows the 1961 Act to its conclusion.

Three things do change in practice. Arrears relief for tax year 2026-27 is claimed on Form 39 under Rule 73 rather than Form 10E under Rule 21AA. A government employee under the old regime who used to claim the entertainment allowance deduction under Section 16(ii) can no longer claim it. An employee posted away from a house he owns should re-examine the annual value under Section 21(6), because “any reason” is a wider test than the old employment condition and may bring a second house to nil that previously did not qualify.

Beyond that, the regime decision continues to turn on how many deductions a person can claim, exactly as before, and the figures to watch are in the annual Finance Act rather than in the change of statute. The old versus new tax regime comparison and the how to switch tax regime guide both work off the 2025 Act numbering.

Related Articles

• Income tax for government employees
• Income tax slabs for AY 2027-28
• Section 115BAC
• Section 202 of the Income-tax Act 2025
• New tax regime
• Old tax regime
• Old versus new tax regime
• How to switch tax regime
• Form 10-IEA and opting out of the new regime
• Deductions allowed in the new tax regime
• Standard deduction
• Entertainment allowance
• Section 87A rebate
• Marginal relief on income tax
• Surcharge on income tax rates
• Health and education cess
• Rebate, deduction and exemption compared
• Section 89 relief
• How to fill Form 10E
• HRA exemption under Section 10(13A)
• House rent allowance
• Professional tax
• TDS on salary
• Form 16
• Form 12BB
• Form 26AS
• Advance tax
• Central Board of Direct Taxes
• National Pension System
• NPS tax benefits
• Unified Pension Scheme
• Income tax for pensioners
• Family pension
• Dearness relief
• Gratuity for central government employees
• Leave encashment
• Commutation of pension
• Dearness allowance
• Take-home salary of central government employees
• Central government employees in India
• Income tax calculator
• HRA exemption calculator

External references

• Income-tax Act, 2025: the bare Act and its full text (incometaxindia.gov.in)
• Income-tax Rules, 2026 (incometaxindia.gov.in)
• Income-tax forms, 2026 (incometaxindia.gov.in)
• Income Tax Department, taxpayer services (incometax.gov.in)
• Lok Sabha, committee reports (sansad.in)
• India Code, bare Acts of Parliament
• The Gazette of India

References

1. Income-tax Act, 2025 (Act No. 30 of 2025), Section 1(3), assented by the President of India on 21 August 2025 and in force from 1 April 2026.
2. Income-tax Act, 2025, Section 3(1) and 3(2), defining the tax year.
3. Income-tax Act, 2025, Section 536, repeal of the Income-tax Act, 1961 and savings, clauses (a) to (v), with Section 536(3) on the construction of references to earlier years and Section 536(4) applying Section 6 of the General Clauses Act, 1897.
4. Income-tax Act, 2025, Section 535, removal of difficulties, with the three-year sunset at Section 535(3).
5. Income-tax Act, 2025, Sections 11, 19, 21, 22, 93, 123 to 156, 157, 202, 392, 395, 397, 510 and 533, and Schedules III and XV.
6. Report of the Select Committee on the Income-tax Bill, 2025 (Eighteenth Lok Sabha), SCITB 2025 No. 01, presented to the Lok Sabha on 21 July 2025, paragraphs 1.16, 1.17, 1.19, 1.20 and 1.23, and Chapter III carrying 566 observations and recommendations.
7. Income-tax Bill, 2025 (Bill No. 24 of 2025), introduced in the Lok Sabha on 13 February 2025, and the Income-tax (No. 2) Bill, 2025 (Bill No. 104 of 2025), passed by the Lok Sabha on 11 August 2025 and the Rajya Sabha on 12 August 2025.
8. Taxation Laws (Amendment) Act, 2025 (Bill No. 105 of 2025), clause 2, inserting Section 10(12AA) into the Income-tax Act, 1961 with effect from 1 April 2025.
9. Finance Act, 2026 (Act No. 4 of 2026, assent 30 March 2026), Chapter III Part B, clauses 35 to 129, amending the Income-tax Act, 2025, including clause 122 substituting Section 536(2)(g), (h) and (l) and clause 123 inserting Schedule III serial 38A with Note 12; and Sections 2(6) and 3(15) charging the health and education cess at 4% under the 1961 and 2025 Acts respectively.
10. Income-tax (Amendment) Ordinance, 2026, promulgated 5 June 2026, inserting Schedule IV serials 13D and 13E with retrospective effect from 1 April 2026.
11. Income-tax Rules, 2026, made under Section 533 of the Income-tax Act, 2025 and in force from 1 April 2026: Rule 65, Rule 73, Rule 205, Rule 208, Rule 215, Rule 218(3), Rule 219, Rule 245 and Rule 279.
12. Income-tax Act, 1961, Sections 3, 10(10), 10(10A), 10(10AA), 16, 23(2), 24, 87A, 89, 115BAC, 192 and 297.