Latest Income Tax Rules 2025–26: What CA Professionals and Taxpayers Must Know

Latest Income Tax Rules 2025–26: What CA Professionals and Taxpayers Must Know

India's income tax landscape has undergone its most significant transformation in over six decades with the enactment of the Income-Tax Act, 2025, which replaced the 1961 law from 1 April 2026. Alongside this structural overhaul, Budget 2025–26 introduced taxpayer-friendly changes including a ₹12 lakh tax-free income threshold under the new regime (₹12.75 lakh for salaried individuals with standard deduction), revised TDS/TCS provisions, and updated compliance forms and deadlines. This blog breaks down the latest rules, key dates, and actionable insights for CA websites and their clients.

1) New Income-Tax Act, 2025: A Structural Reset (Effective 1 April 2026) The Income-Tax Act, 2025 received Presidential assent on 21 August 2025 and came into force from 1 April 2026, making Tax Year 2026–27 the first year governed by the new code. The 1961 Act stands repealed, but transitional provisions ensure that income up to 31 March 2026 continues to be assessed under the old law.

2) Budget 2025–26: Tax Slabs, Rebates, and the Default New Regime For FY 2025–26 (AY 2026–27), the new tax regime under Section 115BAC is the default for resident individuals. Key highlights: - Tax-free income up to ₹12 lakh due to an enhanced rebate of ₹60,000 under Section 87A. - Standard deduction of ₹75,000 for salaried taxpayers, pushing the effective zero-tax threshold to ~₹12.75 lakh. - Revised seven-band slabs applicable progressively.

3) Critical Compliance Deadlines for September–October 2026 - Tax Audit Season 2026: Form 3CD has been amended with notable changes in Clause 12, Clause 19, and new Clause 36B. - Ensure daily electronic books backup under Rule 46(8) of Income-tax Rules 2026 on servers physically located in India.