The 1961 Act is repealed. Tax audit is section 63, reported in Form 26 under Rule 47 — and every period up to 31 March 2026 still runs under the old law.
On 1 April 2026 the Income-tax Act, 2025 came into force, and section 536 of that Act repealed the Income-tax Act, 1961. The Income-tax Rules, 2026 replace the 1962 Rules. For a statute that governed every direct-tax computation, notice, appeal and audit report in India for sixty-five years, the change is administratively larger than it is conceptually: most of the charge, most of the machinery and most of the arithmetic survive in re-arranged and re-numbered form.
The practical consequence of the re-numbering is a large volume of paper that now cites a statute which no longer exists — engagement letters, board resolutions, withholding clauses in contracts, internal checklists, standing file notes. None of it is void. All of it needs reading before it is reused.
Two statutes are live at the same time
The dividing line is the period, not the date of filing. Periods up to 31 March 2026 remain governed by the 1961 Act: the accounts for the year ended 31 March 2026, the audit report on them, the return for that year, and every assessment, reassessment, rectification and appeal on that year or an earlier one.
Periods from 1 April 2026 are governed by the 2025 Act. For years to come the same client generates work under both statutes at once, and the first question to ask of any document is which year it belongs to.
That is not an inconvenience to be absorbed in a quarter. Appeals run for years and reassessment reaches back further, so a team that stops reading the 1961 Act will make mistakes on files still open.
Tax audit: section 63, Form 26, Rule 47
The audit of accounts of certain persons carrying on business or profession — what everyone calls tax audit — is section 63 of the Income-tax Act, 2025, and the report is Form 26, prescribed by Rule 47 of the Income-tax Rules, 2026. Those three references are confirmed by the guidance note issued by the Central Board of Direct Taxes on 6 March 2026.
The structural change worth noting is the single form. Under the old regime the report came in two pieces: an audit report in Form 3CA or Form 3CB, depending on whether the accounts were already audited under another law, with the statement of particulars in Form 3CD annexed. Form 26 consolidates that into one report.
The sequencing follows from the cut-off. A report for the year ended 31 March 2026 is made under the former section 44AB of the repealed Act, in the forms its rules prescribed. The first reports under section 63 in Form 26 are for the year ending 31 March 2027 — so the 2026 audit season runs on the old forms while the checklists for the next one are rebuilt.
Do not rely on a mapping table
Mapping charts of the "old section X is now section Y" kind have circulated since the Bill stage, and they are not reliable. At least one widely shared table gives tax audit as section 44 of the new Act, which is wrong. A mapping table is somebody's reading of a re-drafted statute: wherever the drafting merged, split or moved a provision, the mapping is a judgement rather than a fact, presented without the reasoning that would let you check it.
The safe method is dull and it works. Read the provision in the bare Act, read the rule, read the form the Rules prescribe, and cite only what you have read. Where a number is not needed, describe the provision instead: "the provision requiring tax to be deducted on fees for professional services" is always correct, while a wrong section number is wrong in a way somebody may act on.
What actually needs doing
- Go through every template citing a 1961 section — engagement letters, representation letters, audit checklists, standard notes — and decide for each whether it addresses a pre-2026 period, where the citation is correct and stays, or a current one, where it has to be rewritten.
- Review contractual tax clauses at renewal. Gross-up, indemnity and withholding clauses naming 1961 sections are ordinarily saved by the rule that a reference to a repealed enactment reads as a reference to the corresponding new provision — but "ordinarily" is a poor answer to give a counterparty.
- Rebuild the tax audit working papers against Form 26 before the year ending 31 March 2027 closes, not while it is closing.
- Keep the 1961 Act and the 1962 Rules to hand as they stood on 31 March 2026. Open assessments and appeals will need them for years.
- Date every internal note and every advice. In a transition year an undated note about "the section" is worthless: the reader cannot tell which statute it means.
What has not changed
The rhythm a business runs on is the same in substance. Tax deducted is deposited by the seventh of the following month. Quarterly statements of deduction fall on the last day of the month following the quarter, with the quarter ended 31 March at 31 May, and statements of collection fall on the fifteenth. An audit still consists of obtaining evidence rather than of completing a form.
Nor has the meaning of the report changed. It remains a statement of particulars an assessing authority can rely on without repeating the work, signed by a member who has satisfied himself of them. Renumbering a statute does not alter what that signature carries.
This note reflects the position as on 15 April 2026. Positions change by notification and circular.