Income Tax Act 2025: New tax utility tool to compare old and new sections before April 1, 2026 rollout

With the Income Tax Act, 2025 set to replace the Income Tax Act, 1961 from April 1, 2026, the Income Tax Department has introduced a new online comparison utility that allows taxpayers to check old and new provisions side-by-side before filing returns. The tool is aimed at reducing confusion as several section numbers, terms, and structures in the tax law are being changed, even though tax rates and most deductions remain the same.

The new law restructures the entire legislation rather than changing the tax system itself. The earlier Act had over 800 sections and dozens of chapters, while the new Act reorganises provisions into fewer sections with simpler language. At the same time, the Income Tax Rules, 1962 have been replaced by Income Tax Rules, 2026 with a reduced number of rules and a more streamlined format.

Because of this renumbering and restructuring, many familiar provisions such as Section 80C, 80D, 54, 54F and 80G will continue in substance, but their numbering or wording may change, making it difficult for taxpayers to identify the correct section while filing returns. The new utility has been launched to address this exact problem.

What is the new tax comparison utility

The newly launched feature on the income tax portal allows users to read provisions of the Income-tax Act, 1961 and the Income-tax Act, 2025 together on the same screen. The display is divided into two panels, showing the old section on one side and the corresponding provision in the new Act on the other.

This parallel reading function helps taxpayers, chartered accountants, and businesses understand how a provision has changed, whether it has been renumbered, rewritten, or moved to another chapter. Experts say the feature will be especially useful during the transition year when both laws may need to be referred to for different assessment periods.

Why the tool is important before filing returns

The transition to the new law will happen gradually. Income earned up to March 31, 2026 will still be governed by the Income Tax Act, 1961, while income earned from April 1, 2026 onwards will fall under the new Act.

Since the same taxpayer may need to refer to both laws in different situations, the comparison tool helps avoid mistakes while claiming deductions, reporting income, or interpreting notices.

The department has clarified that ongoing assessments, appeals, or old cases will continue under the 1961 Act until they are fully completed, so taxpayers should check which law applies before filing or responding to notices.

How to use the new tax utility

The comparison tool is available on the official income tax website and can be used without logging in.

Users need to select the Act and section number from a dropdown menu. Once a section from the 1961 Act is chosen, the system automatically shows the corresponding provision under the 2025 Act. The full text of both laws can also be accessed from the same page.

For example, the definition of “previous year” under the old Act is replaced with the term “tax year” in the new law, which simplifies the earlier system that used both previous year and assessment year.

Simplifying I-T filing

One of the major changes in the new Act is the introduction of a single term called Tax Year, replacing the earlier concept of previous year and assessment year, which often confused taxpayers. Under the new system, the year in which income is earned and reported will be referred to as the same tax year.

Experts say the new comparison utility is a key tool for salaried taxpayers and professionals to understand the revised structure before filing returns after April 2026, as the shift to the new law focuses on clarity, digital filing, and easier interpretation — but requires taxpayers to be familiar with the updated provisions.