Taxation★ Must Know

CBDT Issues Clarificatory FAQs for Transition to the Income-tax Act, 2025

By TestNeeti Editorial TeamPublished Tuesday, 7 July 2026 3 min readSource: CA - Tax DeptArticle 4 of 21

The Central Board of Direct Taxes (CBDT), under the Department of Revenue, Ministry of Finance, has issued comprehensive Clarificatory FAQs on the transition provisions under Section 536 — dealing with "Repeals and Savings" — of the Income-tax Act, 2025. The clarifications were issued through Office Memorandum F. No. 370149/107/2026-TPL dated 6 July 2026, following representations after the Income-tax Act, 2025 came into force with effect from 1 April 2026, and were approved by the Member (Legislation), CBDT. The FAQs provide administrative and legal clarity on the applicable framework during the shift from the Income-tax Act, 1961 to the Income-tax Act, 2025, covering summons and notices, search and post-search proceedings, powers to call for information, jurisdiction and PAN migration, provisional attachment, recovery and directors' liability.

Key Facts & Details

10 points

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The CBDT issued comprehensive Clarificatory FAQs on transition provisions under Section 536 ("Repeals and Savings") of the Income-tax Act, 2025.
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The FAQs were issued via Office Memorandum F. No. 370149/107/2026-TPL dated 6 July 2026, with the approval of the Member (Legislation), CBDT.
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They follow representations received by the Tax Policy and Legislation (TPL) Division after the Income-tax Act, 2025 came into force with effect from 1 April 2026.
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The FAQs clarify the applicable statutory framework during the transition from the Income-tax Act, 1961 to the Income-tax Act, 2025 across a wide spectrum of issues.
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On summons and notices, matters relating exclusively to a period before 1 April 2026 may use powers under Section 131 of the 1961 Act read with Section 536(2)(c) of the 2025 Act.
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For searches or requisitions initiated before 1 April 2026, the repealed 1961 Act continues to apply under Section 536(2)(v), while those initiated on or after that date fall under Section 246 of the 2025 Act.

Deep Dive

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The FAQs address a wide spectrum of issues including jurisdiction and PAN migration, provisional attachment and recovery, directors' liability, penalties, tax clearance certificates, prosecution, and registrations under sections 12AB and 80G.
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On jurisdiction transfers, orders where notices under Section 127(2) of the 1961 Act were issued before 1 April 2026 may be passed under the 1961 Act, while migrations initiated on or after that date fall under Section 243 of the 2025 Act.
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On directors' liability of private companies, liability may arise under Section 179 of the 1961 Act or Section 323 of the 2025 Act depending on the period to which the demand relates.
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On provisional attachment, an assessment for a period before 1 April 2026 may attract Section 281B of the 1961 Act, while other cases fall under Section 500 of the 2025 Act.

Exam Focus

Examiners may ask the body that issued the FAQs (CBDT), the section on repeals and savings (Section 536), the new law and its effective date (Income-tax Act, 2025 from 1 April 2026), or the Office Memorandum date (6 July 2026).

Exam Relevance & Angle

The transition from the Income-tax Act, 1961 to the Income-tax Act, 2025 is a landmark tax-law reform, and knowing the issuing body (CBDT), the key transition provision (Section 536) and the effective date (1 April 2026) is directly relevant to taxation, banking and civil-services general-awareness sections.

Target Exams

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Background & Context

The Central Board of Direct Taxes (CBDT) is a statutory authority functioning under the Central Board of Revenue Act, 1963, within the Department of Revenue, Ministry of Finance, and is the apex body for administering direct taxes such as income tax in India. A "Repeals and Savings" clause in a new statute repeals an older law while "saving" specified actions, proceedings and liabilities that arose under it, so that pending matters do not lapse during the switch. The Income-tax Act, 1961 governed direct taxation for over six decades before being replaced by the Income-tax Act, 2025. Transition FAQs and office memoranda are administrative tools the CBDT uses to guide field officers and taxpayers on how the old and new provisions apply during the changeover period.