What is the Income-tax Act, 2025 and when did it come into effect?

The Income-tax Act, 2025 replaced the Income Tax Act 1961 from April 1, 2026. It simplifies the entire direct tax framework, renumbers sections, removes redundancies, and modernizes taxation for India.

Is the Income Tax Act 1961 still valid after April 2026?

The Income Tax Act 1961 was repealed under Section 536 of the new Act from April 1, 2026. However, all assessments, appeals, and proceedings for periods before April 1, 2026 continue under the old ITA 1961 rules.

What is the new section number for Section 80C in Income Tax Act 2025?

Section 80C of the ITA 1961 maps to Section 123 of the Income-tax Act, 2025. Deductions for LIC premiums, PPF, ELSS, EPF, and home loan principal repayment continue under the new act.

What is the new section for TDS on professional fees (194J)?

Section 194J (TDS on professional and technical services) of the old Income Tax Act 1961 has been renumbered in the Income-tax Act, 2025. Use our free converter at ita1961to2025.in to find the exact new section number instantly.

How do I convert old income tax section numbers to new 2025 numbers?

Visit ita1961to2025.in and use the free section search tool. Type any old ITA 1961 section number (e.g., 80C, 194J, 139) and instantly see the new Income-tax Act, 2025 equivalent, its status, and key changes.

Is the ITA 1961 to 2025 mapping tool free for CAs and tax professionals?

Yes, completely free. The section mapper, comparison cheat sheet, PDF download, and Tax Academy blog are all free for Chartered Accountants, tax lawyers, law students, and taxpayers.

Which sections were completely deleted in the new Income Tax Act 2025?

Several redundant and overlapping sections from ITA 1961 were not carried into the Income-tax Act, 2025. Use our free converter — each section is marked as Retained, Modified, or Deleted so you can quickly check any section's status.

Can I download the ITA 1961 to Income-tax Act 2025 comparison as a PDF?

Yes! Visit the Comparison page at ita1961to2025.in/comparison to download a free cheat sheet PDF showing side-by-side mapping of key ITA 1961 sections to their Income-tax Act, 2025 equivalents.

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ITA 1961 → ITA 2025GAAR

Section 97 → Section 196

Arrangement to lack commercial substance

RetainedHigh - Destroys paper-only corporate restructurings.

Quick Answer

Section 97 of the Income Tax Act, 1961 (Arrangement to lack commercial substance) corresponds to Section 196 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.

What changed for Section 97

Section 97 of the 1961 Act sets out the rules on arrangement to lack commercial substance. Deems an arrangement to lack commercial substance if it involves round-tripping of funds, accommodating parties, or elements that cancel each other out.

Under the Income-tax Act, 2025 (effective 1st April 2026), Section 97 is retained and renumbered as Section 196 of the Income-tax Act, 2025. Retained. Specifically targets shell companies used purely for tax routing.

The transition impact on Section 97 is assessed as High. Destroys paper-only corporate restructurings.

Old Law (ITA 1961)Ch: X-A

Sec 97

Provision Summary

Deems an arrangement to lack commercial substance if it involves round-tripping of funds, accommodating parties, or elements that cancel each other out.

New Law (ITA 2025)Ch: XIII

Sec 196

Provision Summary

Retained. Specifically targets shell companies used purely for tax routing.

Key Changes & Highlights

Substance over form is now the codified legal standard.

Frequently Asked Questions

Which subject does Section 97 of the 1961 Act cover?

Section 97 of the Income Tax Act, 1961 covers arrangement to lack commercial substance. Deems an arrangement to lack commercial substance if it involves round-tripping of funds, accommodating parties, or elements that cancel each other out.

What is the new section number for Section 97 under the Income-tax Act, 2025?

Section 97 of the Income Tax Act, 1961 maps to Section 196 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Specifically targets shell companies used purely for tax routing.

How does the Income-tax Act, 2025 affect Section 97 in practice?

The transition impact for Section 97 is rated High. Destroys paper-only corporate restructurings.

What is new about Section 97 under the Income-tax Act, 2025?

Substance over form is now the codified legal standard. These points are specific to Section 97 (Arrangement to lack commercial substance).

Disclaimer: This mapping of Section 97 (Arrangement to lack commercial substance) to Section 196 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 97 is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.

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