CBDT issues clarificatory FAQs on transition provisions under the Income-tax Act, 2025

In brief

The Central Board of Direct Taxes (CBDT) has issued1 a detailed set of Frequently Asked Questions (FAQs) clarifying the operation of the transition provisions contained in section 536 of the Income-tax Act, 2025 (ITA 2025), which repealed and replaced the Income-tax Act, 1961 (the Act or ITA 1961) with effect from 1 April 2026. The FAQs address various interpretational and procedural issues that have arisen during the transition to the new tax regime and provide guidance on determining whether proceedings should continue under the Act or be governed by ITA 2025.

The FAQs largely reaffirm the legislative intent underlying section 536 of the ITA 2025 by ensuring continuity of proceedings relating to periods prior to 1 April 2026 while facilitating a seamless transition to the new framework for subsequent years