Direct answer
From 1 April 2026 the Income-tax Act, 2025 uses a single tax year: the April-to-March year in which you earn the income. It replaces the old pair of “previous year” and “assessment year”. So AY 2026-27 and Tax Year 2026-27 are different years of income: AY 2026-27 is income earned April 2025 to March 2026 (old Act, return filed in 2026); Tax Year 2026-27 is income earned April 2026 to March 2027 (new Act, return filed in 2027).
Since April, the question I get most from salaried clients isn't about rates. It's “my CA says AY 2026-27, the news says tax year 2026-27, are these the same thing?” They aren't, and mixing them up is how people end up quoting the wrong section in a reply to a notice.
The two years side by side
| Income-tax Act, 1961 | Income-tax Act, 2025 | |
|---|---|---|
| Year you earn income | Previous year (financial year) | Tax year |
| Year it is assessed | Assessment year (the next year) | Same tax year (no separate AY) |
| Income Apr 2025 – Mar 2026 | FY 2025-26 / AY 2026-27 | — |
| Income Apr 2026 – Mar 2027 | — | Tax Year 2026-27 |
| When that return is filed | 2026 | 2027 |
| Section numbers to quote | 80C, 80D, 87A … | 123, 126, 156 … |
Source: CBDT FAQs on interplay and transition from the Income-tax Act, 1961 to the Income-tax Act, 2025; Income-tax Act, 2025 (as amended by Finance Act, 2026).
A worked timeline (illustration)
Illustration: Riya, a salaried employee in Kolkata, gets her FY 2025-26 Form 16 in June 2026. The return she files by the 2026 due date is for AY 2026-27 and is governed entirely by the 1961 Act, so her deductions are still described as 80C and 80D. Her salary from April 2026 onward belongs to Tax Year 2026-27. Her employer computes TDS on it under the 2025 Act, and she files that return in 2027, citing the new section numbers.
The CBDT FAQs say there is no clash between AY 2026-27 and Tax Year 2026-27, and no year in which you file two returns for the same income.
Where people slip
- Quoting a 2025-Act section for 2025-26 income, or the reverse. Match the section to the year in which you earned the income.
- Assuming renumbering changed a limit. Renumbering doesn't change limits by itself; the Finance Act does. Check the current text before you rely on a figure.
- Old documents (rent receipts, investment proofs) don't need redoing. What changes is the reference in the return and in the forms your employer issues.
For the section numbers that matter to individuals, see the Income-tax Act 2025 section mapping. To check which regime suits you for Tax Year 2026-27, use the old vs new regime calculator.