KIND ATTENTION TAXPAYERS! As part of its efforts to support taxpayers and stakeholders in the transition to the Income-tax Act, 2025, the Income Tax Department has released comprehensive FAQs explaining the interplay with the Income-tax Act, 1961.
Preface
The Income-tax Act, 2025 replaces the Income-tax Act, 1961 with effect from 01.04.2026, marking a significant milestone in India’s ongoing effort to build a tax system that is simpler, more transparent, and taxpayer-friendly. A legislative transition of this magnitude inevitably gives rise to a range of interpretational and practical questions, particularly in relation to the treatment of pending proceedings, ongoing compliance obligations, existing claims, and rights and liabilities that have accrued under the earlier law. Recognising these concerns, this compendium of Frequently Asked Questions has been prepared to provide clear, structured, and accessible guidance on the interplay and transitional provisions between the two statutes.
The FAQs are organised into ten thematic areas: the general philosophy underlying the transition, tax payments, filing of income-tax returns, other statutory forms and procedural requirements, reassessment proceedings, TDS compliance, dispute resolution mechanisms, carry forward and set-off of losses, NRI-related provisions, and other miscellaneous transitional issues. These sections collectively seek to address both the foundational principles guiding the shift to the new regime and the practical situations that taxpayers, professionals, and administrators are likely to encounter during the transition phase.
Efforts have been made to present the issues clearly and systematically, supporting a seamless transition from the earlier regime to the new one. This compendium is intended to offer clarity and foster a consistent understanding and approach among taxpayers, tax professionals, tax officers and tax officials.
The transition to a new statute is a shared and evolving exercise involving all stakeholders including tax officers and officials. It is hoped that this compendium will serve as a practical and reliable reference, facilitating informed compliance, reducing uncertainty, and supporting a smooth and effective migration to the Income-tax Act, 2025.