The Income-tax Act, 2025 took effect on 1 April 2026. The transition changes terminology, references and reporting; it does not mean every old-period obligation disappears. Use the salary and TDS calculator with the income year selected before comparing results.
AY 2026–27 and Tax Year 2026–27 are different periods
Assessment Year 2026–27 under the old Act relates to income for FY 2025–26. Tax Year 2026–27 under the new Act relates to income from April 2026 to March 2027. A document labelled only “2026–27” can therefore refer to different income. Always state the underlying dates.
Salary TDS uses the payment and applicable period
The Income Tax Department's transition FAQ identifies section 192 for salary paid under the old framework and section 392(1) for the new framework. It instructs employers to reset the salary TDS projection for the new tax year from April 2026, considering expected salary, eligible deductions and the employee's regime.
Map old references rather than deleting history
Investment language such as “80C” remains familiar to employees, but the Department maps that old reference to Schedule XV read with section 123 in the new Act. Current declarations should use the new references with an explanatory old-name crosswalk where helpful. A correction for an old period still belongs to its old framework.
Check forms and software
The Department describes Form 138 as the new salary TDS quarterly statement, previously Form 24Q. Payroll templates, declaration forms, exported files and tax-year selections should agree. A calculation can use the right rates yet fail a filing because the reference or period is wrong.
A payroll team's transition checklist
- Identify the payment and income period.
- Use current section and form references.
- Reconcile the salary projection and tax already deducted.
- Keep old-period records separate and retain corrections.
- Verify the current utility before uploading a return.
Use the compliance calendar to retain the due date and period together.
Official sources and scope
Source review: 2026-10-08. Check the relevant notification and your own records before filing or settling an entitlement.