CBDT FAQs on New Income Tax Act: Pending Cases, TDS Transition

India is moving from the Income Tax Act, 1961, to the Income Tax Act, 2025, a shift that has left taxpayers, businesses, and tax professionals with questions about pending assessments, procedural matters, and ongoing applications.

The Central Board of Direct Taxes (CBDT) issued a detailed set of Frequently Asked Questions (FAQs) on 6 July 2026 to address these concerns. The FAQs, released through an official memorandum, explain how pending cases and various tax proceedings will be handled once the new law takes effect on 1 April 2026.

The guidance covers pending assessments, Lower Deduction Certificates (LDCs), No Deduction Certificates (NDCs), search cases, tax recovery proceedings, prosecutions, registrations, and other procedural matters.

Old law governs old tax years

The CBDT clarified that all proceedings relating to tax years beginning before 1 April 2026 will continue to be governed by the Income Tax Act, 1961, even after the new law comes into force. The Income Tax Act, 2025, will not apply to events or tax years preceding that date. Pending proceedings will continue under the old law until concluded, the board said.

This means that even if certain proceedings are pending when the new law takes effect, they will still follow the procedures prescribed in the earlier legislation. The provisions of the repealed Income Tax Act will also apply to proceedings initiated after 1 April 2026 if they relate to a tax year starting before that date, the CBDT said.