What the Announcement Says (from Institute of Chartered Accountants of India — BOS)

  • The Income-tax Act, 2025 has received Presidential assent on 21 August 2025.
  • The Act will come into force from 1 April 2026, i.e. it becomes effective for the financial year beginning 1 April 2026.
  • The first “tax year” under the new Act will therefore be 2026-27 (ending 31 March 2027).
  • Accordingly, for students of ICAI, the new Act's provisions will be relevant in CA Examinations conducted from May 2027 onwards.
  • Specifically, the change affects:
    • Intermediate Course — Paper 3A: Income-tax Law
    • Final Course — Paper 4: Direct Tax Laws & International Taxation
    • Self-Paced Online Module Set C – Paper 5: International Taxation (for exams from 1 May 2027)

 

🧾 What the New Act (2025) Intends — Key Features / Purpose

  • The Income-tax Act, 2025 is designed to replace the decades-old Income‑tax Act, 1961, with a view to simplify and modernize India’s direct tax law framework.
  • The new Act reduces the number of sections significantly — from over 800 under the 1961 Act to 536 sections under the 2025 Act.
  • Definitions have been restructured and consolidated under a simplified Section 2, bringing clarity (e.g. standardizing definitions like “senior citizen” which earlier appeared in multiple places)
  • The 2025 Act introduces plain-language drafting, logically organised structure, updated schedules and tables, with the aim of reducing litigation, easing compliance burden, and improving transparency.
  • Taxation principles remain broadly stable to ensure continuity, but presentation is streamlined for enhanced usability by taxpayers, professionals, and authorities. Press

 

🎯 Practical & Professional Implications (for You / CA Practitioners)

  • From FY 2026-27 onward, tax assessments, filings, and litigation will be governed by the Income-tax Act, 2025, not the 1961 Act.
  • As a CA professional and member of the tax community, compliance, advisory, audit, tax planning — and all professional outputs — need to be aligned with the new law.
  • For members of ICAI (including you), the relevant CA syllabus for taxation will reflect the new Act — so academic and practical knowledge must update accordingly.
  • Existing precedents, interpretations, and procedural practices under the 1961 Act may need re-evaluation in light of revised language, definitions and structure.

    Source
    https://resource.cdn.icai.org/89799bos-announcement-income-tax-act-2025.pdf