Short answer: nothing lapsed. Section 536 of the Income-tax Act, 2025 preserves every proceeding, right, liability, approval and registration arising before 1 April 2026, and they run to completion under the 1961 Act. That includes the department's power to open something new about an old year.
What Section 536 actually does
Section 536 is the repeal-and-savings provision of the 2025 Act. It runs to 22 sub-clauses and is reinforced by Section 6 of the General Clauses Act, 1897, which supplies the default rule that repeal does not disturb accrued rights and pending matters unless the repealing statute says so. The 2025 Act does not say so — it says the opposite, at length.
In practice it preserves:
- Pending proceedings — assessments, reassessments, penalty proceedings, appeals, revisions, rectifications
- Accrued rights and liabilities — refunds due, demands raised, interest accrued
- Approvals and registrations — 12AB, 80G and the rest, along with PAN and TAN
- The power to initiate fresh proceedings about pre-2026 years
- Prior assessments — repeal does not reopen or invalidate them
What this means in practice
Your appeal continues, under the old numbering. An appeal filed under Section 246A of the 1961 Act does not become an appeal under Section 357 of the 2025 Act. It stays where it was, is heard on the old Act's provisions, and is decided under them. The same is true of a pending scrutiny, a rectification application, or a penalty proceeding.
Your registrations did not expire. A trust holding 12AB registration and 80G approval under the 1961 Act holds them still. What binds is the renewal date on the registration itself, not the change of Act.
Old circulars still work. They govern pre-2026 years outright, and continue for post-2026 matters to the extent consistent with the new Act. There is no master continuation circular — the position rests on the CBDT transition FAQs plus Section 536. Where a genuine conflict arises on a post-2026 issue, the Act wins.
Losses and credits carry forward untouched. Carried-forward business and capital losses continue without a reset of the carry-forward period. Unutilised MAT and AMT credit continues for the balance of its fifteen-year window.
⚠️ Savings cut both ways
The provision that protects your refund claim also protects the department's ability to come after an old year.
A fresh 1961-Act notice can issue after 1 April 2026 for a pre-2026 year. Section 536 saves the power, not merely the paperwork already in motion. "The Act under which this notice is issued has been repealed" is not an objection that goes anywhere.
What does go somewhere is limitation — and it must be tested against the 1961 Act, because that is the Act that governs the year:
| 1961 Act (old years) | 2025 Act (TY 2026-27 on), s.282 | |
|---|---|---|
| Show-cause notice | s.148A procedure | 4 years; 6 years if escaped income ≥ ₹50 lakh (s.281) |
| Reassessment notice | 3 years 3 months; 5 years 3 months if escaped income ≥ ₹50 lakh (s.148, as recast from 1 Sep 2024) | 4 years 3 months; 6 years 3 months if ≥ ₹50 lakh (s.280) |
| Earliest a notice may issue | — | Not within 1 year of the end of the tax year, s.282(3) |
Applying the new Act's four-year limit to a 1961-Act notice would concede time the department may not actually have, or manufacture an objection that does not exist. Both are avoidable. See Section 148 reassessment notices: time limits and defences.
The limitation dates that still decide everything
Whatever else is arguable, these are not. For an order under the 1961 Act:
| Step | 1961 Act | Time limit | 2025 Act equivalent |
|---|---|---|---|
| Appeal to Commissioner (Appeals) | s.249 | 30 days | s.358 |
| Appeal to the Tribunal | s.253 | 60 days | s.362 |
| Appeal to the High Court | s.260A | 120 days | s.365 |
| Rectification | s.154 | 4 years | s.287 |
These run from service of the order. They are the first thing to check on anything that arrives, because a strong case that is out of time is worth considerably less than a modest one that is in time.
Two years, running side by side
Through FY 2026-27, AY 2026-27 (FY 2025-26 income, 1961 Act) and tax year 2026-27 (2025 Act) are both live on the e-filing portal. Payments and filings have to be tagged to the right one. A challan against the wrong year leaves the intended demand outstanding and accruing interest.
Where to go next
For how to tell which Act a notice belongs to and the full notice-section mapping, see income tax notices under the new Act. For the sections outside the assessment chapter, the old-to-new mapping is the quick reference, and Income Tax Act 2025 vs 1961 covers what changed in substance.
This is a working reference, not the statute. For anything you are filing or relying on, confirm the section text against the Act or the department's official 1961-vs-2025 comparison utility.