The Ledger

For the first time since 1961, Indian businesses are reading their tax position out of a different statute. The Income-tax Act, 2025 came into force on 1 April 2026, reorganising the law into 536 sections across 23 chapters in place of the sprawling 1961 Act. For promoter-led enterprises the significance lies less in headline rates than in architecture — and architecture is harder to retrofit than a rate change.

The Act replaces the twin concepts of "previous year" and "assessment year" with a single tax year running 1 April to 31 March. In practice this removes a genuine source of error: clients who filed for the wrong year, notices quoting an assessment year that nobody in the finance team recognised, advance-tax challans tagged to the wrong period.