The Institute of Chartered Accountants of India (ICAI) has released an important announcement dated 5 December 2025 regarding the applicability of the Income-tax Act, 2025 in CA examinations. This update is highly relevant for CA Intermediate and CA Final students preparing for 2026 and 2027 attempts.
This article provides a clear, simplified explanation of the notification and how it applies under the new three-attempt exam cycle (January, May/June, September).
📌 Summary of the ICAI Notification
As per the official notification issued by ICAI (BOS-A) 89799bos-announcement-income-ta…:
- The Income-tax Act, 2025 received Presidential assent on 21 August 2025.
- The Act becomes effective from 1 April 2026.
- It applies for the tax year 2026–27.
- Since this tax year ends on 31 March 2027, ICAI will examine the new law only in exams conducted after that date.
🔔 Therefore, the new Income-tax Act, 2025 will be applicable from the May/June 2027 attempt onwards.
This is the official and final applicability.
📚 Applicability Under the New 3-Exam Pattern
ICAI now conducts CA exams three times a year. With this structure, the applicability of the Income-tax Act, 2025 becomes:
| Attempt | Law Applicable |
|---|---|
| January 2026 | Income-tax Act, 1961 |
| May/June 2026 | Income-tax Act, 1961 |
| September 2026 | Income-tax Act, 1961 |
| January 2027 | Income-tax Act, 1961 |
| May/June 2027 | Income-tax Act, 2025 (NEW) |
| September 2027 | Income-tax Act, 2025 |
| January 2028 | Income-tax Act, 2025 |
✔ First exam with new Income-tax Act, 2025: May/June 2027
📘 Papers Where the New Act Will Apply
According to the notification 89799bos-announcement-income-ta…, the following papers will now be based on the Income-tax Act, 2025 from May 2027 onwards:
CA Intermediate
- Paper 3A – Income-tax Law
CA Final
- Paper 4 – Direct Tax Laws & International Taxation
Self-Paced Online Modules
- Set C – Paper 5: International Taxation
(Applicable from 1 May 2027 exam session onward)
📅 Why May/June 2027 Is the First Applicable Attempt
The logic is straightforward:
- New Act effective: 1 April 2026
- Applicable to tax year: 2026–27
- Tax year ends: 31 March 2027
- ICAI examines last completed tax year
- Next exam after 31 March 2027 = May/June 2027 attempt
Thus, May/June 2027 is the first logical and official attempt.
🎯 What This Means for Students
If you are preparing for exams in 2026 (Jan, May/June, Sept):
✔ Continue studying Income-tax Act, 1961
✔ No syllabus change for Direct Tax or International Taxation
If you are preparing for 2027 exams:
✔ Expect transition to Income-tax Act, 2025
✔ ICAI will release updated:
- Study Material
- Case Laws & MCQs
- RTPs/MTPs
- Practice Questions
✔ Begin familiarising yourself with the new structure once ICAI uploads study material.
📝 Conclusion
The new Income-tax Act, 2025 marks a major shift in India’s direct tax framework. ICAI has ensured a smooth and student-friendly transition by applying the law only from May/June 2027 onwards, giving students sufficient time to prepare.
In short:
👉 All exams till January 2027 follow the Income-tax Act, 1961
👉 All exams from May/June 2027 onwards follow the Income-tax Act, 2025
This clarity helps CA aspirants plan their preparation confidently and avoid confusion caused by unofficial sources.
Stox N Tax 
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