The New Income Tax Act 2025: A Property Owner's Guide
India replaced its sixty year old income tax law on 1 April 2026. If you are selling property, here is what actually changed and what did not.
What happened
The Income Tax Act of 1961 governed Indian income tax for over six decades. It was replaced by a new Act, passed in 2025, which took effect from 1 April 2026.
The new law applies to income from the financial year 2026 to 2027 onwards. Matters relating to earlier years continue under the old Act, so for a while both will be referred to in practice.
The short answer for property owners
The core rules you care about have not changed.
- You still pay tax on the gain when you sell property
- You can still substitute the 1 April 2001 value if the property was bought before that date
- Inflation adjustment using the published index still applies
- Exemptions for reinvesting in a house still exist
- You still need a report from a registered valuer for official purposes
The main change is presentation. The law was reorganised and simplified, cutting the number of sections substantially and reordering them into fewer chapters.
Why this matters practically
Two reasons.
Section numbers have changed. If you search online for a section you were told about, you may find articles citing numbers from the old Act. Those articles are not necessarily wrong about the principle, but the reference may no longer match. Ask your accountant to confirm against the current law.
Old reports and letters cite old sections. A valuation report from 2020 will reference the 1961 Act. That does not make it invalid. It was correct when written.
What we changed in our reports
Our reports now reference the current law, and where a valuation relates to an earlier year we make clear which Act applies to that matter. We would rather state it plainly than leave an officer guessing.
What has not changed at all
The requirement for a registered valuer. That has not moved. A report from someone who is not registered was not acceptable before and is not acceptable now. More on that.
Neither has the need for real evidence behind a 2001 valuation. If anything, as more people use the provision, the quality of the evidence matters more, not less.
Should you do anything differently?
For most property owners, no. Sell as you would have, get a properly evidenced valuation, file correctly.
If you are in the middle of something that spans the changeover, such as a sale agreed in one year and completed in another, mention it to your accountant. That is where the transition rules matter, and it is worth a specific conversation rather than an assumption.
Questions people ask us
- Do I need a new valuation because the law changed?
No. A valuation establishes what a property was worth on a date. That fact does not change because the law was renumbered. If your report was properly evidenced, it remains so.
- Has the 1 April 2001 rule been removed?
No. The ability to substitute the 2001 value for property bought before that date continues. It is one of the provisions carried across.
- Have tax rates changed?
Rates are set separately each year through the annual finance legislation rather than by this change. Ask your accountant for the rate applying to your sale.
- My old report cites the 1961 Act. Is it useless now?
Not at all. It was correct when it was written. If it is being used for a current matter, we can issue a fresh report referencing the current law where that helps.
Checked by Parish Rao, Chartered Engineer and Government Approved Valuer.
Page last checked on 23 August 2026.
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