Income Tax Department Publishes Reassessment FAQs for Income Tax Act, 2025: New Sections, Old-Act Transition and Time Limits Explained
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The Income Tax Department has published a detailed set of FAQs explaining how reassessment proceedings operate under the Income Tax Act, 2025 and how pending or future proceedings for earlier assessment years continue to interact with the repealed Income Tax Act, 1961.
How reopening works under the new Act
For tax years governed by the new law, the Assessing Officer must have information suggesting that income has escaped assessment. Before a reopening notice under section 280 is issued, the normal process under section 281 requires a show-cause notice, an opportunity for the taxpayer to respond, consideration of that response and a reasoned order under section 281(3). The FAQ says prior approval of the Additional Commissioner or Joint Commissioner is required.
The Department lists several kinds of information that can support reopening, including information identified under the Board's risk-management strategy, audit objections, information received under agreements with foreign governments or specified territories, information made available under a notified collection scheme, Tribunal or Court directions, survey material, directions from the Approving Panel and specified findings or directions in orders.
When the section 281 process can be skipped
The FAQ identifies limited situations where the Assessing Officer need not follow the full section 281 procedure before issuing a section 280 notice. These include specified information received under the faceless collection scheme, directions from the Approving Panel relating to an impermissible avoidance arrangement and certain findings or directions contained in orders of authorities, Tribunals or Courts. Even in such cases, the approval requirement before the section 280 notice remains relevant.
Which years fall under the new reassessment regime
A major transition clarification is that sections 279 to 286 of the Income Tax Act, 2025 apply to Tax Year 2026-27 and subsequent tax years. For tax years beginning before April 1, 2026, reassessment continues under the old Act. Practitioners therefore need to identify the relevant tax or assessment year before deciding which statutory framework, forms, approval hierarchy and limitation rules apply.
The Department further clarifies that reassessment proceedings already initiated under sections 147 and 148 of the 1961 Act and pending on April 1, 2026 continue under the old law by virtue of section 536(2)(c) of the 2025 Act. Where a section 148A show-cause notice was issued before April 1 but the consequential section 148 notice is issued later, the old-law sequence can continue subject to the limitation period under section 149 of the 1961 Act.
Time limit for completing reassessment
For proceedings under the new law, the FAQ states that section 286(1) provides a one-year period from the end of the financial year in which the section 280 notice was served for passing the reassessment order. The law also contains extensions and exclusions for specified situations, including transfer-pricing references and Tribunal or Court stays.
What tax teams should check now
- Identify whether the case belongs to a tax year governed by the 2025 Act or an earlier assessment year governed by the 1961 Act.
- Track the correct notice sequence and approval authority before responding.
- For old-law cases continuing after April 1, 2026, verify section 149 limitation and the legacy return-filing framework.
- Maintain a clear procedural chronology because the new FAQ distinguishes the normal section 281 process from statutory exceptions.
The practical takeaway is that reassessment now requires a dual-framework check: the new Act governs Tax Year 2026-27 onward, while older assessment years can still be reopened and completed under the 1961 Act where the transitional and limitation conditions are satisfied.
Useful official links
Key takeaway
A newly published official FAQ resolves practical transition questions on reassessment as the 2025 Act framework becomes operational.
