From 1 April 2026, India’s income tax is governed by the new Income-tax Act, 2025, which replaces the Income-tax Act, 1961 that had been in force for more than six decades. If you run a business, a private limited company, an LLP or a partnership firm in Bihar, you will start seeing new section numbers, new form numbers and a new term – “tax year” – on notices, TDS certificates and advice from your CA.
The good news: the new Act does not impose any new tax and does not change tax rates. It is a rewrite to make the law shorter and simpler. This guide explains what has changed, what has not, and what you should do now.
The new Act at a glance
| Particular | Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|---|
| Sections | 819 | 536 |
| Schedules | 14 | 16 |
| Rules | 511 | 333 |
| Forms | 399 | 190 |
| Year concept | Previous Year + Assessment Year | Single “Tax Year” |
Source: Income Tax Department – Objective and scope of the new Act.
1. “Tax Year” replaces Previous Year and Assessment Year
Under the old law, income earned in a financial year (the “previous year”) was assessed in the next year (the “assessment year”). This caused endless confusion – FY 2025-26 was AY 2026-27. The new Act uses one term: the tax year, which is simply the financial year from 1 April to 31 March.
So income earned from 1 April 2026 to 31 March 2027 is Tax Year 2026-27 – no separate assessment year.
2. What applies to your FY 2025-26 return?
This is the most common question we get. Income earned up to 31 March 2026 continues to be governed by the old 1961 Act. That means:
- Returns for FY 2025-26 (AY 2026-27) are filed under the 1961 Act, using the old forms and section numbers.
- Companies and audited businesses file their ITR for FY 2025-26 by 31 October 2026 (unless extended by CBDT).
- Pending assessments, appeals and notices for earlier years continue under the old Act.
- Advance tax, TDS and TCS for Tax Year 2026-27 follow the new Act.
3. New section numbers you will see
Almost every section has been renumbered. Here are the ones business owners meet most often:
| Provision | Old section (1961 Act) | New section (2025 Act) |
|---|---|---|
| Concessional 22% tax for domestic companies | 115BAA | 200 |
| Minimum Alternate Tax (MAT) | 115JB | 206 |
| New tax regime for individuals / HUFs | 115BAC | 202 |
| Deduction for investments (PPF, LIC, ELSS etc.) | 80C | 123 |
| Medical insurance deduction | 80D | 126 |
| Rebate for individuals | 87A | 156 |
| Filing of income tax return | 139 | 263 |
| TDS provisions | 192 to 194T | 393 (consolidated) |
Read more about the company tax option in our guide: Section 115BAA (now Section 200) vs normal tax rate.
4. New form numbers
Many familiar forms have new numbers under the new rules. A few you will notice quickly:
- Form 16 (salary TDS certificate) → Form 130
- Form 16A (non-salary TDS certificate) → Form 131
- Form 26AS (tax credit statement) → Form 168
- Form 15G / 15H (no-TDS declarations) → Form 121
5. What has NOT changed
- Tax rates – still set every year through the Finance Act.
- The new tax regime for individuals continues (now Section 202).
- The 22% company tax option continues (now Section 200).
- Presumptive taxation for small businesses and professionals continues.
- PAN, TAN, faceless assessment and e-filing continue as before.
What should your business do now?
- File FY 2025-26 returns under the old Act – do not mix up old and new section numbers.
- Update TDS processes for Tax Year 2026-27 – new section references and new certificate form numbers.
- Update accounting and payroll software so ledgers and TDS reports use the new sections.
- Review agreements, invoices and board resolutions that quote income tax sections, and update references for future use.
- Plan advance tax for Tax Year 2026-27 – the next instalments fall due on 15 December and 15 March.
Frequently asked questions
Has the income tax rate changed under the new Act?
No. The Income-tax Act, 2025 does not impose any new tax. Rates continue to be announced through the annual Finance Act.
Is my FY 2025-26 return filed under the new Act?
No. Income up to 31 March 2026 is governed by the 1961 Act, so FY 2025-26 (AY 2026-27) returns use the old law and forms.
Can my company still opt for the 22% tax rate?
Yes. The 115BAA option continues as Section 200 of the new Act, with the same broad conditions. Once exercised, it cannot be withdrawn.
Do I need a new PAN or TAN?
No. Your existing PAN and TAN continue.
Need help with the transition?
efilingBihar has helped 20,000+ businesses in Bihar with income tax, GST and company compliance since 2010. Whether it is your company ITR-6, TDS returns or income tax return filing, our team in Srikrishnapuri, Patna can help.
Call or WhatsApp: 095343 31454 · Mon–Sat, 9:30 AM – 7 PM
This article is for general information and is based on the law as of September 2026. Please consult a tax professional for advice on your specific situation.