[Opinion] Transition Risks Under the Income Tax Act, 2025

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  • Last Updated on 22 June, 2026

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Section 536 of Income Tax Act 2025

Harshavardhana Datar – [2026] 187 taxmann.com 757 (Article)

1. Section 297 of the Income Tax Act 1961 was the section that enabled the repeal and saving of the Income Tax Act 1922. A similar enactment is made in section 536 of the Income Tax Act 2025. Repealing part of these provisions disables the operation of the old legislation. But saving part of the same, enables the limited operations to maintain the continuity and safeguard of various past actions, rights, liabilities, etc.

2. However, it has a peculiar provision that was absent in ITA 1961. In Section 297 of ITA 1961, a saving was made only for pending proceedings and other corollary things as stated above. But Clause ‘c’ of Subsection 2 of Section 536 of ITA 2025 goes beyond that. It provides as follows:
“ the provisions of the repealed Income-tax Act shall continue to apply to any proceeding pending on the date of commencement of this Act and to any proceedings initiated on or after the 1st April, 2026 (including notices, assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeals) in respect of any tax year beginning before the 1st April, 2026 and such proceedings shall be carried out as per the procedure specified in the repealed Income-tax Act;”

3. This clause has two parts. First says provisions of repealed act (i.e. ITA 1961) shall continue to apply to any proceedings pending on commencement of ITA 2025. This is similar to repeal and saving under section 297 of ITA 1961.

4. However, next part is pivotal. It states that provisions of the repealed act (i.e. ITA 1961) shall continue to apply to any proceedings initiated on or after 1st April 2026 in respect of any tax year beginning before 1st April 2026. And it also provides that such proceedings shall be carried out as per procedures under ITA 1961.

5. This part mandates that even after the repeal of ITA 1961, if proceedings are initiated after 1st April 2026 in respect of the tax year that begins before 1st April 2026, it must be done as per law as well as procedures under ITA 1961. Means any new proceedings in respect of the earlier period have to be in accordance with ITA 1961 and rules thereunder.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied