Assessment Year Is Gone: the Income-tax Act 2025 Is Now Live

From 1 April 2026, India files under the Income-tax Act 2025, not the 1961 Act. The phrase Assessment Year is retired for a single Tax Year, and the section numbers an NRI property seller has memorised have changed. The tax itself has not.

The headline reads like an overhaul. For an NRI who owns a flat in Bangalore or Hyderabad, the substance is steadier than that. What moved is the vocabulary. What stayed is the bill.

What changed

The Income-tax Act 2025 came into force on 1 April 2026 and replaces the Income-tax Act 1961. Two changes matter for an NRI who owns or sells property in India.

First, the Assessment Year is gone. The old system paired a Financial Year with a later Assessment Year. The new law works with one Tax Year, which is the financial year itself. Income earned in a tax year is taxed in that tax year. The two-name system is over.

Second, the sections are renumbered. The provisions did not move in substance, but their addresses changed:

What it means if you own property in India

If you sell, the mechanics are the same and the citations are new. The buyer still deducts TDS on the full sale price, you still settle the capital-gains position, and you still file. What changes is the paperwork's vocabulary. Your CA will cite Section 393(2) where the deduction used to read Section 195, and file Form 144 where it used to be Form 27Q.

The rate has not changed. Long-term capital gains on property held beyond 24 months are taxed at 12.5% plus surcharge and cess, the same as before the new Act. The lower or nil TDS certificate, your tool to cut what is withheld at source, still exists; we covered its renumbering to Form 128 in an earlier note.

For the substance behind the new numbers, see TDS on sale of property by an NRI and capital gains tax on NRI property.

One date to keep separate

Two 2026 changes are easy to confuse. The Income-tax Act 2025 and the Tax Year are live now, from 1 April 2026. The separate relief that lets a resident buyer use a PAN instead of a TAN when buying from an NRI starts later, on 1 October 2026. Same year, different dates. We track the TAN change in our note on buying from an NRI.

FAQ

Is Assessment Year still used in 2026? No. From 1 April 2026, under the Income-tax Act 2025, there is a single Tax Year, which is the financial year. The separate Assessment Year is retired.

Has Section 195 changed for NRI property sales? The number has. TDS on a payment to a non-resident, formerly Section 195, is now Section 393(2) under the Income-tax Act 2025. The deduction itself works the same way.

Did the TDS rate on NRI property sales change? No. Long-term capital gains stay at 12.5% plus surcharge and cess. The new Act renumbered the sections and forms; it did not change the rate.

Selling and want the new compliance handled?

66 MG Road runs the sale paperwork for NRI owners under the new Act through vetted CA partners: the right section citations, Form 144, the lower-TDS certificate, and the repatriation, with itemized billing and proof. We operate in Mumbai, Pune, Bangalore, Hyderabad, Chennai, and Gurgaon. See TDS on sale of property by an NRI or request a proposal.

66 MG Road newsdesk

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