ITA 2025 Transition Checklist

Section 1: Understand the New Structure

• “Tax Year” replaces “Previous Year” — FY 2026-27 = Tax Year 2026-27; return filed in same year (AY concept abolished)
• Section renumbering completed — ITA 2025 sections are NOT the same as ITA 1961; update all internal references
• Review new Chapter structure — 23 Chapters, 536 sections (vs 298 in ITA 1961); new plain-language drafting
• Identify applicable provisions — Map your client’s income heads to new sections; use the section correlation table
• Update accounting software — Ensure Tally/Genius/Computax updated for ITA 2025 section codes before FY 2026-27

Section 2: Key Section Mapping (ITA 1961 → ITA 2025)

Section 3: TDS / TCS Migration (Sec. 393 & 394)

• Update TAN registration — existing TAN remains valid; update designation in TRACES profile
• New TDS return format — Form 24Q, 26Q, 27Q replaced by unified Form 138 (resident) and Form 140 (non-resident)
• Quarterly filing deadlines unchanged — Q1: 31 July, Q2: 31 Oct, Q3: 31 Jan, Q4: 31 May
• Deductee PAN linkage — Aadhaar-PAN link mandatory; higher TDS (20%) if PAN inoperative
• Lower TDS certificate — old Form 13 certificates expire; apply fresh under new Sec. 393(9) from FY 2026-27
• TCS under Sec. 394 — threshold and rate structure same as ITA 1961 Sec. 206C; no change in rates for FY 2026-27
• Update payroll software — salary TDS calculation engine to reference Sec. 393 and new slab rates under Sec. 6

Section 4: Regime Choice for FY 2026-27

• New Regime is now default — taxpayers must opt-out to choose Old Regime; revise TDS declarations accordingly
• Standard Deduction ₹75,000 — available under New Regime for salaried; no change in Old Regime (₹50,000)
• Deductions checklist — 80C, 80D, 80G available only under Old Regime; HRA exemption only Old Regime
• Business income taxpayers — once Old Regime chosen (for business income), opt-out only once; re-entry rules apply
• Compare both regimes — run calculation for each client/employee before Form 12BB submission

Section 5: Return Filing Changes

• ITR forms updated — CBDT to issue new ITR forms for Tax Year 2026-27; monitor notification by April 2027
• Updated return window — ITA 2025 allows updated return within 4 years (vs 2 years under ITA 1961)
• Faceless assessment continues — no change in faceless scheme; notices issued under new section references
• Form 26AS / AIS — continue to reconcile; CIBIL-linked AIS introduced for high-value transactions
• Penalty provisions — Sec. 270A equivalent in ITA 2025 is Sec. 439; under-reporting penalty 50%, misreporting 200%

Section 6: Capital Gains Under ITA 2025

• LTCG on equity (Sec. 89) — ₹1.25 lakh annual exemption; 12.5% flat rate (no indexation); replaces Sec. 112A
• STCG on equity (Sec. 88) — 20% flat rate (increased from 15% in FY 2024-25 budget); STT-paid transactions
• Property gains (Sec. 75-78) — indexation benefit available only for Old Regime; without indexation 12.5% rate
• Debt MF (Sec. 90) — gains taxed at slab rate (no LTCG benefit); review client portfolios
• Carry forward losses — LTCL can now be set off against LTCG only; STCL against any capital gain

Section 7: Internal Compliance Actions

• Train finance/accounts team — ITA 2025 section mapping workshop; update SOP documents
• Update all tax notices & correspondence templates — replace old section references
• Revise tax audit report formats — Form 3CA/3CB/3CD updated for ITA 2025 — use new forms from AY 2027-28
• Update agreements & contracts — TDS indemnity clauses should reference ITA 2025 sections
• Software subscription renewed — Computax / Genius annual update includes ITA 2025 changes; verify before filing season