Income-tax Act, 2025 for CA Final May 2027: Where the 2026 DT Sections Went

Yes. The Income-tax Act, 2025 applies to CA Final from the May 2027 exams. ICAI's announcement dated 5 December 2025 puts Final Paper 4, Direct Tax Laws and International Taxation, on the new Act for tax year 2026-27. To see what this does to an answer, I looked up the main section of every question in the May 2026 and November 2026 DT papers in the Income Tax Department's official 1961-vs-2025 utility. On ICAI's own May 2026 suggested answers, 110 of 118 marks (93.2%) rest on a provision that now has a different number. Adding my count of the November 2026 paper gives 219 of 236 (92.8%). Only section 9 kept its number outright, and it carried 4 marks.

May 2027 is the first CA Final DT paper on the 2025 Act, so re-address every old section number yourself, starting with the provisions ICAI tests most.

TL;DR

• The 2025 Act applies from May 2027. Both 2026 DT papers were set on the 1961 Act.
• 110 of 118 marks in ICAI's May 2026 suggested answers sit on renumbered provisions; across both 2026 papers it is 219 of 236.
• 18 of the 54 old numbers tested now mean something else. New section 28 is about rent, rates, taxes, repairs and insurance; business income moved to 26.
• Tax year replaces previous year and assessment year, and Form 3CD becomes Form 26.

Is the Income-tax Act, 2025 applicable for CA Final May 2027?

Yes. The Act got Presidential assent on 21 August 2025 and came into force on 1 April 2026. Its first tax year, 2026-27, ends on 31 March 2027, so ICAI examines it from May 2027. The announcement applies it to Final Paper 4 from the May 2027 exams, and to SPOM Set C Paper 5 (International Taxation) for exams held from 1 May 2027.

The 2026 papers did not touch it. ICAI's May 2026 suggested answers cite assessment year 2026-27 throughout. The November 2026 paper, as I read it, cites only the 1961 Act, even for events after 1 April 2026.

From May 2027, Paper 4 is written on the 2025 Act for tax year 2026-27.

What does the September 2026 study material change?

ICAI's study material for May and November 2027 has four modules and keeps the 28 chapters, numbered as in the 2026 edition. The cover now reads "As per the Income-tax Act, 2025 as amended by the Finance Act, 2026", with significant notifications and circulars up to 30 September 2026.

• Old circulars and case laws stay where they fit the new law, with the 1961 section numbers replaced. ICAI's example is Notification 60/2018, the STT condition, now read with section 198.
• The Income-tax Rules, 2026 and their forms were notified on 20 March 2026, so Rule and Form numbers change too.

ICAI's material says circulars and notifications up to 31 October 2026 that are not in the book go into a Statutory Update for May 2027 on the BoS Knowledge Portal. If you are still picking a course, our DT faculty comparison shows which courses say they follow the 2025 Act.

The 28 chapters are the same. The section numbers and the year terms inside them are not.

Tax year or assessment year: which term do I write?

Tax year. Section 3 of the 2025 Act defines it as the twelve-month financial year starting on 1 April. The official utility shows no corresponding provision for the old assessment year (section 2(9)) and previous year (section 2(34)) definitions. In the 2027 chapters I searched, ICAI uses tax year almost throughout. The exception is the Black Money law in Chapter 19, which keeps its own AY and PY definitions.

Write "tax year 2026-27" in income-tax answers, and keep AY and PY for Black Money questions.

How many 2026 DT marks sit on sections with new numbers?

Almost all. Here is the split:

• On ICAI's May 2026 suggested answers, 110 of 118 marks (93.2%) rest on a provision with a new number.
• Adding the November 2026 paper, it is 219 of 236 printed marks (92.8%): 110 in May and 109 in November.
• 13 marks (5.5%) needed no Act section: model convention articles, BEPS Action 2 and a Finance Act rate.
• 4 marks (1.7%) were on section 9, the only one of the 54 provisions tested that kept its number outright. Old 17 (2 marks) is split across new 16, 17 and 18, so I count it as renumbered.

Method: I gave each question and sub-part of the two papers (118 marks each) its main 1961 Act section and looked it up in the Income Tax Department's 1961-vs-2025 utility, at section level. TDS table serials come from ICAI's September 2026 study material. November figures come from a student-shared copy of the paper, counted twice; 17 of its marks were not visible, so I worked them out from the question totals, and its section readings are mine.

Source: ICAI suggested answers (May 2026), CBDT utility, ICAI study material for May 2027; November 2026: student-shared copy, not an ICAI document; Gradehunt analysis.

Provisions with 6 or more marks, and where they sit now

• Business income computation: old 28, now 26. 28 marks.
• Tax audit: old 44AB, now 63. 12 marks.
• Charitable trusts, now registered non-profit organisations (RNPOs): old 11, now 332 to 355. 8 marks.
• Advance ruling procedure: old 245R, now 384. 8 marks.
• Tax on accreted income: old 115TD, now 352. 8 marks.
• Head office expenditure: old 44C, now 60. Presumptive income of non-residents: old 44BBC, now 61. 6 marks each.
• DTAA relief: old 90 and 91, now 159 and 160. 6 marks each.
• Arm's length price and associated enterprise: old 92C and 92A, now 165 and 162. 6 marks each.
• TDS on purchase of goods (old 194Q, now 393(1) Sl. No. 8(ii)) and TCS (old 206C, now 394): 6 marks each.

Chapter-wise marks are in our CA Final DT paper analysis. The mapping tells you where to look in the new Act, not that the rule is unchanged, so check rates and limits in the 2027 chapter.

Nine in ten DT marks of 2026 now need a different section number, and business income plus tax audit alone carried 40 of them.

Which old section numbers now mean something else?

This is where I expect the most slips: a familiar number that is a real section of the 2025 Act about something else. 18 of the 54 old numbers tested in 2026 now belong to a different provision. The ones I would learn first:

• 2(22) was the dividend definition (now 2(40)). New 2(22) defines capital asset.
• 56 was income from other sources (now 92). New 56 is interest income of specified financial institutions.
• 139 was return of income (now 263). New 139 is a deduction for developing a Special Economic Zone.
• 192 was salary TDS (now 392). New 192 is tax in block assessment of search cases.

It works the other way too. 27 of the new numbers these provisions land on (26 sections and clause 2(40)) had another meaning in the 1961 Act. New 37 is the actual payment rule, where old 37 was the general deduction. New 63 is tax audit; old 63 defined "transfer".

Double-check any familiar number: 18 old and 27 new numbers from the 2026 papers point to different provisions in the two Acts.

How do TDS and TCS questions look under sections 393 and 394?

Apart from salary TDS (old 192, now section 392), the 2026 papers tested eight old TDS and TCS sections (194C, 194LBA, 194Q, 194R, 194S, 194T, 195A and 206C). All eight now sit in section 393 (TDS) or 394 (TCS), and items on them carried 22 marks. ICAI's 2027 Chapter 13 cites the table serial, so your answer should too:

• Purchase of goods (old 194Q): section 393(1), Table Sl. No. 8(ii).
• Contractors (old 194C): section 393(1), Table Sl. No. 6(i).
• Firm's payments to partners (old 194T): section 393(3), Table Sl. No. 7.

Other Paper 4 forms change too: 15CA and 15CB for foreign remittances become Forms 145 and 146, 10F becomes Form 41, and the transfer pricing report 3CEB becomes Form 48. Rule 37BA on TDS credit is now Rule 203.

Quote section 393 or 394 with its table serial, and the new form number, in every TDS or TCS answer.

Can I still use past papers and suggested answers?

Yes, for the questions. Section 536(2)(j) keeps 1961 Act circulars and notifications in force so far as they are consistent. ICAI's 2027 material also keeps 1961-Act case laws, with the section numbers replaced and the facts and decisions unchanged.

How I would use the 2026 papers from our CA Final suggested answers page:

1. Solve each question as set, then rewrite every section reference using the official utility.
2. Mark every rate or limit in the old solution and check it against the 2027 chapter.
3. Keep the trap numbers above on one page and test yourself on them each week.
4. Write at least one full DT paper by hand on the 2025 Act, with new section numbers and tax year, before May 2027.

Past papers still teach the questions. The section numbers and year terms in your answers have to be written fresh.

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