Section 1 of the Income-tax Act, 2025 — Short Title, Extent and Commencement Explained

In plain language

What Section 1 actually says

Section 1 is the very first provision of the Income-tax Act, 2025 (Act No. 30 of 2025), and it does three simple but foundational jobs. It tells us the name of the law, where it applies, and from when it takes effect. In the words of the Act itself:

• Sub-section (1) — Short title: "This Act may be called the Income-tax Act, 2025." This is the official name by which the law is cited in courts, notices, returns and agreements.
• Sub-section (2) — Extent: "It extends to the whole of India." Income tax is a Union subject under the Constitution, so a single central law applies uniformly across every State and Union Territory, including Jammu & Kashmir and Ladakh.
• Sub-section (3) — Commencement: "Save as otherwise provided in this Act, it shall come into force on the 1st April, 2026." So even though the Act was passed in 2025, it becomes operational from 1 April 2026, i.e. from the first day of Financial Year (Tax Year) 2026-27.

Why the name says 2025 but it starts in 2026

A law is named after the year it is enacted (passed by Parliament and given Presidential assent), not the year it becomes effective. The Income-tax Act, 2025 received assent in 2025, hence the name, but Parliament deliberately fixed the commencement at 1 April 2026 so that businesses, professionals and the tax department had a full lead time to prepare. This mirrors history: the old Income-tax Act, 1961 was named 1961 but came into force on 1 April 1962.

Who does it apply to

Everyone who earns income taxable in India. Because Section 1 extends the Act to the whole of India, it binds every "person" as later defined in the Act — individuals, Hindu Undivided Families (HUFs), firms, LLPs, companies, associations of persons, local authorities and every other artificial juridical person. It also reaches non-residents to the extent their income is earned or received in India. Section 1 itself imposes no tax; it simply switches on the entire machinery of the Act for the whole country.

The "save as otherwise provided" safety valve

The phrase "save as otherwise provided in this Act" is important. It means the default start date is 1 April 2026, but individual provisions can carry their own different commencement dates if the Act (or a government notification issued under it) specifies one. This lets the government stagger certain rules where needed, without disturbing the overall roll-out. In practice, the vast bulk of the Act — its 536 sections across 23 chapters and 16 schedules — takes effect together on 1 April 2026.

How Section 1 interacts with the rest of the Act

• Charging section: Section 1 only sets the stage; the actual levy of tax flows from the charging provision, which taxes the "total income" of a person's tax year at the rates fixed by the annual Finance Act.
• Tax Year concept: The 2025 Act scraps the confusing pair "previous year" and "assessment year" and introduces a single "tax year" — the twelve-month financial year. Section 1's 1 April 2026 start aligns perfectly with the first tax year, 2026-27.
• Finance Act: Rates, slabs and rebates are not in the Income-tax Act; they are set each year by the Finance Act (for 2026-27, the Finance Act, 2026).

Practical implications for a normal taxpayer

• Income earned up to 31 March 2026 continues to be governed by the old Income-tax Act, 1961.
• Income earned from 1 April 2026 onwards (FY/Tax Year 2026-27) is governed by the new Income-tax Act, 2025.
• Returns, TDS, advance tax and assessments relating to 2026-27 will cite the new Act. There is no action required from you on account of Section 1 alone — it is a switch-on clause, not a compliance obligation.