The new Income-tax Act, 2025: what changed for salaried people
The 1961 Act was replaced on 1 April 2026. Tax year, new section numbers, Form 130 instead of Form 16, and what stayed the same for 2026-27.
Try it: Income tax calculator: old vs new regimeCompare your tax under the old and new regimes for tax year 2026-27, with the ₹12 lakh rebate, standard deduction, cess, surcharge and the deductions that make the old regime worth it.From 1 April 2026 India's income tax runs on the Income-tax Act, 2025, which replaced the Income-tax Act, 1961. The aim was a shorter, plainer law. For most salaried people the tax you pay in 2026-27 is the same; the words, section numbers and forms are what changed.
"Tax year" replaces two terms
The old law used "previous year" for the year you earn and "assessment year" for the year after, when you file. The new Act uses one term, tax year, for April to March. April 2026 to March 2027 is tax year 2026-27.
New section numbers
The ones salaried people meet most:
- 80C (EPF, PPF, ELSS, life insurance, tuition fees) is now section 123.
- NPS deductions are in section 124.
- 87A, the rebate, is now section 156.
- 115BAC, the new regime, is now section 202.
Your employer's declarations and your return will use the new numbers.
New form numbers
- Form 16, the salary TDS certificate, is now Form 130.
- Form 16A is Form 131.
- Form 12BB, for investment proofs, is Form 124.
- Form 26AS, the annual tax statement, is Form 168.
What did not change for 2026-27
Budget 2026 kept the slabs. In the new regime, income up to ₹12 lakh pays no tax after the rebate, and salaried people get a ₹75,000 standard deduction, so a salary of up to ₹12.75 lakh pays nothing. Slabs run from nil up to ₹4 lakh to 30% above ₹24 lakh. The old regime keeps its ₹2.5 lakh nil band, ₹50,000 standard deduction and its deductions.
What did change
- HRA: Bengaluru, Hyderabad, Pune and Ahmedabad now get the 50% limit with Delhi, Mumbai, Kolkata and Chennai. See our HRA guide.
- Tax-free perks: higher limits for children's education allowance (₹3,000 a month a child), hostel allowance (₹9,000 a month a child), meals (₹200 a meal) and gifts from employers (₹15,000 a year).
- Revised returns: the last date moves to 31 March.
Deadlines this year
Returns for 2025-26 that need a tax audit are due on 21 November 2026, after CBDT extended the date from 31 October on 28 September 2026. Belated returns for 2025-26 can be filed until 31 December 2026.
Compare both regimes on your own salary in the income tax calculator.
Sources: CBDT: due date extended to 21 November 2026, PIB: Budget 2026 summary, PIB: new regime slabs, ClearTax: income tax changes from April 2026, Mondaq: Income-tax Rules 2026, Income Tax Department FAQ on the 2025 Act.
This is general information, not tax advice.
Rules, rates and limits change. Check the official source linked above before you rely on a figure here. Posts never contain referral or affiliate links from the writer.
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