Income Tax & GST, explained simply.

Welcome to BharatTax. We are a Chartered Accountant's working library for Indian income-tax. Our purpose is to give you, the taxpayer or fellow professional, the kind of advice you would receive from a senior Chartered Accountant across a desk -- but in a form you can read at midnight, on a phone, just before you file. We do not summarise the law. We explain it, with examples, with the case law, and with the practitioner's observations that come from actually defending positions in front of the Assessing Officer.

This page is your starting point. From 1 April 2026 the Income-tax Act, 2025 (Act No. 30 of 2025) replaces the six-decade-old Income-tax Act, 1961. The transition will run for several years, and your tax compliance for assessment year 2025-26 and assessment year 2026-27 will continue under the older statute even as you begin planning under the new one. Below, we give you the brief, the numbers, and the calendar -- in that order. Detailed per-section commentary on every provision of both Acts, plus 23 practitioner articles, sit linked from the resource library further down.

Why a New Income-tax Act, and Why Now

The Income-tax Act, 1961 has been amended more than sixty-five times. Layered over six decades, it has produced a statute with twenty-three primary chapters, almost three hundred numbered sections, and nearly twice as many sub-sections (such as 80-IA, 80-IAC, 115BAA, 115BAC, 115BAE) inserted by successive Finance Acts. The Direct Tax Code drafts of 2009 and 2013 attempted reform but did not progress. The Income-tax Act, 2025 is the culminated reform -- a single, modernised, digital-era statute consolidating the old framework into 23 chapters and 536 sections.

Crucially, the substantive law is largely preserved. What changes is structure, terminology, and the codification of frameworks (faceless assessment, Dispute Resolution Panel, Dispute Resolution Committee) that emerged organically through 2017 to 2024. The repeal is gentle -- section 536 of the new Act preserves all pending proceedings, registrations, certificates, and case-law for matters under the old Act. Practitioners therefore need to maintain a dual-Act library for the next four to five years.

At a Glance: Tax Year 2025-26 versus Tax Year 2026-27

The table below captures the essentials of both filing cycles. Read it once for orientation; the detailed commentary on each item follows.

Finance Act, 2024 (No. 2): The Most Substantial Amendment in Years

Finance Act, 2024 (No. 2) -- enacted in the second budget cycle of 2024 -- was the most consequential amendment to direct taxes in this decade. The headline change was a complete restructure of capital gains taxation effective 23 July 2024. But Finance Act, 2024 also abolished buy-back tax, separated online gaming into its own section, increased the standard deduction in the new regime, enhanced the employer's National Pension System contribution cap, extended the updated return window to four years, and introduced a presumptive regime for non-resident cruise ship operators.

The Capital Gains Restructure -- Effective 23 July 2024

Until 22 July 2024, capital gains were taxed under a fragmented regime: 10% on listed equity long-term gains (with INR 1 lakh annual exemption); 20% with indexation on most other long-term assets; 15% on short-term listed equity. Finance Act, 2024 unified the long-term rate at 12.5% across most asset classes, removed indexation as a general rule, raised the listed-equity short-term rate to 20%, and increased the listed-equity long-term exemption to INR 1.25 lakh. Real estate received a special carve-out: properties acquired before 23 July 2024 can elect either 12.5% without indexation or 20% with indexation, whichever produces a lower tax.

For practitioners, this restructure has one immediate operational consequence: every capital gains transaction in financial year 2024-25 must be split by the date of transfer. Income-tax Return Schedule for capital gains under assessment year 2025-26 has separate rows for transactions before and after 23 July 2024. Cost of acquisition, indexation election, and threshold exemption must be applied accurately to each split. Our dedicated article on capital gains reporting walks through the worked examples.

Other Significant Finance Act, 2024 Amendments

Beyond capital gains, Finance Act, 2024 made a series of structural changes worth noting in one place. Buy-back tax under section 115QA -- previously paid by the company at approximately 23% of the gain -- was abolished from 1 October 2024. Buy-back proceeds are now taxed in the shareholder's hands, with the issue price treated as deemed dividend at slab rates and any premium treated as capital gains. Online gaming receipts, previously taxed under section 115BB at 30% with separate withholding rules, were carved into a new section 115BBJ at 30% flat with companion section 194BA for year-end aggregation-based tax deduction at source.

The standard deduction under section 16 was enhanced to INR 75,000 in the new regime (from INR 50,000), but the old regime continues at INR 50,000. The employer's National Pension System contribution under section 80CCD(2), preserved in the new regime, was raised to 14% of basic salary for new-regime salaried employees (parity with Government employees, who already enjoyed 14%). The updated return window under section 139(8A) was extended from 24 to 48 months from the end of the assessment year, with new additional-tax bands of 60% and 70% for years three and four respectively.

Income-tax Slabs Applicable for Tax Year 2026-27

With Finance Act, 2024 (No. 2) finalising the slab structure for the new regime and the old regime continuing unchanged, tax year 2026-27 (assessment year 2027-28) inherits the following slab tables. Note that the old regime is now an opt-in regime -- you must elect it through Form 10-IEA before the due date for filing the return. Without such election, the new regime applies by default.

New Regime (Section 115BAC of the Income-tax Act, 1961 / Section 202 of the Income-tax Act, 2025)

The new regime offers fewer exemptions but lower base rates, an enhanced standard deduction of INR 75,000, and a section 87A rebate that effectively eliminates tax up to INR 7 lakh of total income. For high-net-worth taxpayers, the ceiling on surcharge at 25% (rather than 37% in the old regime) is the single largest tax-saving feature.

Surcharge in the new regime: 10% (income INR 50 lakh to INR 1 crore); 15% (INR 1 crore to INR 2 crore); 25% (above INR 2 crore). Health and education cess: 4% on tax plus surcharge.

Old Regime (Election Required via Form 10-IEA)

The old regime is the deduction-rich regime. It offers Chapter VI-A deductions in full -- section 80C investments up to INR 1.5 lakh, section 80D health insurance up to INR 1 lakh, section 80E education loan interest with no cap, section 80G donations, section 80TTA savings interest, section 80TTB senior deposits, plus House Rent Allowance under section 10(13A) and home loan interest under section 24(b) up to INR 2 lakh for self-occupied property. Senior citizens get higher basic exemption thresholds.

Surcharge in the old regime: 10% (INR 50 lakh to INR 1 crore); 15% (INR 1 crore to INR 2 crore); 25% (INR 2 crore to INR 5 crore); 37% (above INR 5 crore). The 37% rate is the principal reason high-net-worth taxpayers earning above INR 5 crore typically migrate to the new regime, where the cap is 25%.

Key Compliance Dates -- Financial Year 2025-26

Compliance discipline saves significant interest, fees, and notices. The table below sets out the principal dates for financial year 2025-26 (assessment year 2026-27) -- the last cycle under the Income-tax Act, 1961. Financial year 2026-27 onwards, the same dates roll forward by one year under the Income-tax Act, 2025.

The BharatTax Resource Library

Beyond this homepage, BharatTax holds a per-section commentary covering both Acts. Each section is presented in a three-block format: the verbatim statutory text as amended by Finance Act, 2025; the cross-mapping between the 1961 Act and the 2025 Act; and the practitioner commentary covering statutory architecture, Finance Act amendment timeline, leading Supreme Court / High Court / Tribunal case-law, and our practitioner planning notes drawn from actual engagements.

About BharatTax

Our content philosophy is practitioner-first. Every article and per-section commentary is written from the angle of: what does this provision mean in client work? We track Finance Act amendment history, leading judicial precedents, and the Central Board of Direct Taxes' positions in real time. The library is updated on every Finance Act, every notification, and every ruling that materially shifts position.

Our companion site itr.bharattax.co houses the practical tools: tax calculators, Income-tax Return step-by-step filers, advance tax planners, capital gains computers, and reconciliation utilities. You will find direct links to the relevant tool from the bottom of every article.

Disclaimer: This article is for general information only. It does not constitute tax / legal advice. Please consult a qualified Chartered Accountant or tax practitioner for advice specific to your circumstances. The legal position is current as of FA 2024 (No. 2) / FA 2025; subsequent amendments and CBDT notifications may modify the position.