India has a new income tax law. The Income-tax Act, 2025 replaced the Income-tax Act, 1961 and has applied since 1 April 2026. If you study income tax for B.Com, CMA or an accounting job, this is what changed and what did not.
The main changes
- One "tax year". The old law used two terms: the previous year in which you earned income and the assessment year in which it was taxed. The new Act uses a single term, the tax year. Income earned from 1 April 2026 to 31 March 2027 belongs to tax year 2026-27.
- A shorter, reorganised law. The new Act has 536 sections in 23 chapters with 16 schedules, compared with more than 800 sections in the old law after six decades of amendments.
- New section numbers. Because the Act was rewritten, familiar section numbers have changed. The Income Tax Department has published a utility that maps each old section to its new one.
What stayed the same
The new Act rewrites the language and structure; it was not a rate change. For tax year 2026-27 the slabs under the new tax regime are:
- Up to ₹4 lakh: nil
- ₹4 lakh to ₹8 lakh: 5%
- ₹8 lakh to ₹12 lakh: 10%
- ₹12 lakh to ₹16 lakh: 15%
- ₹16 lakh to ₹20 lakh: 20%
- ₹20 lakh to ₹24 lakh: 25%
- Above ₹24 lakh: 30%
With the rebate, a resident individual with income up to ₹12 lakh pays no tax under the new regime.
Which law applies to which income
- Income earned up to 31 March 2026 is still dealt with under the 1961 Act (assessment year 2026-27).
- Income earned from 1 April 2026 falls under the 2025 Act (tax year 2026-27).
So for some time accountants will work with both laws: old-law returns and assessments for earlier years, and the new law for current income.
What students should do
- Check which Act your university or institute syllabus is examining this year before you buy a textbook.
- Learn the new section numbers for the topics you use most, such as salary, house property, deductions and TDS.
- Practise computations in the tax-year format, since employers and clients now use it.
Income tax computation, TDS and return filing are part of ISLA's two-month MPA course, and income tax is taught in our B.Com tuition.
Official source: Income Tax Department.
Last checked on 13 October 2026. Exam bodies change dates and rules, so confirm on the official page before you pay or book.