New Provision
Section 3, IT Act 2025
Replaces (IT Act 1961)
28 3
Chapter
Chapter I — Preliminary
Effective From
1 April 2026
Statutory Text — Section 3
(1) For the purposes of this Act, “tax year” means the twelve months period of the financial year commencing on the 1st April. (2) In the case of a business or profession newly set up, or a source of income newly coming into existence in any financial year, the tax year shall be the period beginning with— (a) the date of setting up of such business or profession; or (b) the date on which such source of income newly comes into existence, and ending with the said financial year.
CHAPTER II BASIS OF CHARGE
Shahi & Co. — Our Understanding
Section 3 introduces the concept of 'tax year' — a single 12-month period (April to March) replacing the dual terminology of 'previous year' and 'assessment year' used under the 1961 Act.
Practical Note: Under the old Act, income earned in the 'previous year' was taxed in the 'assessment year'. Under the new Act, both concepts are merged into a single 'tax year' — making the law simpler to read and apply.
Shahi & Co., Chartered Accountants
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Disclaimer: This is a reproduction of Section 3 of the Income Tax Act, 2025 (No. 30 of 2025) as published in the Official Gazette of India (CG-DL-E-22082025-265620) for informational and reference purposes only. Shahi & Co., Chartered Accountants makes no warranty as to completeness or accuracy. For the official authenticated text refer to
egazette.gov.in or
incometaxindia.gov.in. This does not constitute legal or tax advice.