Pending tax proceedings to continue under the old law
This also means that even if certain proceedings are pending when the new law comes into effect, they will still follow the procedures prescribed in the earlier legislation.
CBDT also explained that the provisions of the repealed Income Tax Act will continue to apply to proceedings pending on the commencement date, as well as to proceedings initiated post 1 April, 2026, if they relate to a tax year starting before that date. For complete clarity on the same, the details are explained below:
Clarity on lower TDS certificate applications
For all applications and pleas pending under Section 197 of the Income Tax Act, 1961, which permits taxpayers to seek a lower or nil deduction of tax at source (TDS), the CBDT has also sought to address this issue to bring transparency.
In this regard, applications filed on or before 31 March 2026 that remain pending on 1 April 2026 and for which approval is mandatory for Tax Year 2026-27 onwards, may be administratively considered under the corresponding provisions of the Income Tax Act, 2025.
Still, applications for ‘Lower Deduction Certificates’ or ‘No Deduction Certificates’ filed from 1 April 2026 onwards will be covered entirely by the provisions of the new law, i.e., the Income Tax Act, 2025.
This comprehensive clarification from CBDT aims to ensure a seamless transition between the two tax regimes and provides much-needed guidance for taxpayers, tax professionals, and businesses facing ongoing issues during the current transition period.