Income-tax Act, 2025 or 1961: Which Act Applies to Your Notice?

November 2, 2026

The Income-tax Act, 2025 came into force on 1 April 2026 and repealed the Income-tax Act, 1961. Almost every section number has changed. Yet many notices, assessments and appeals issued after 1 April 2026 still quote the 1961 Act. This is not an error by the department: the new Act itself keeps the old Act alive for earlier years.

The rule: the year of the income decides

Section 536 of the Income-tax Act, 2025 repeals the 1961 Act but saves what was already in motion. Under section 536(2)(c), the 1961 Act continues to apply to proceedings pending on 1 April 2026, and also to proceedings started on or after that date for a tax year that began before 1 April 2026.

In practice, the test is the year of the income, not the date on the notice:

  • Financial year 2025-26 and earlier (assessment year 2026-27 and earlier): Income-tax Act, 1961, even if the notice is issued in 2026 or later.
  • Tax year 2026-27 onwards (income from 1 April 2026): Income-tax Act, 2025.

Penalty proceedings for assessment year 2026-27 and earlier, and appeals that were pending on 1 April 2026, also continue under the 1961 Act.

Examples

  • A scrutiny notice issued in October 2026 for assessment year 2025-26 is issued under section 143(2) of the 1961 Act.
  • An appeal pending before the Commissioner (Appeals) on 1 April 2026 continues under section 246A and section 250 of the 1961 Act.
  • A scrutiny notice for tax year 2026-27, which can only arise after that return is filed in 2027, will be issued under section 270(8) of the 2025 Act.

How to check your notice

  1. Read the heading. It names the Act and the section under which the notice is issued.
  2. Find the year. Look for “assessment year” (1961 Act) or “tax year” (2025 Act).
  3. Check that the two match. A notice for an old assessment year that quotes a 2025 Act section, or the reverse, needs a closer look before you reply.

Common sections in both Acts

Some sections you will often see on notices and orders:

  • Scrutiny notice: 143(2) in the 1961 Act, 270(8) in the 2025 Act
  • Inquiry before assessment: 142(1) became 268(1)
  • Reassessment: 148A and 148 became 281 and 280
  • Rectification: 154 became 287
  • Notice of demand: 156 became 289
  • Penalty for under-reporting: 270A became 439
  • First appeal: 246A became 357
  • Appeal to the Tribunal: 253 became 362

The full table is on our section mapping page, and the converter on our Income-tax Act, 2025 page finds the corresponding section in either direction.

What this means for your reply

Quote the Act and the section that apply to the year of the proceeding. In a reply to a 1961 Act notice, refer to the 1961 Act sections; where useful, add that the proceeding continues under the 1961 Act by virtue of section 536(2)(c) of the Income-tax Act, 2025. Case law under the 1961 Act remains relevant where the wording of the new provision is the same, but each issue should be checked against the new text.

This article is general information as on the date of publication, not advice on any particular case. The law and its interpretation change; check the current position before acting.

Official sources