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Apr 04, 2026
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March vs April salary 2026: Which Income Tax law applies to your paycheck this month?
The Income Tax Department has clarified that taxation depends on the date of payment, not when the salary is earned. Salary paid by March 31, 2026, will fall under the Income-tax Act, 1961, while payments from April 1, 2026, will be taxed under the new Income Tax Act, 2025, as TDS applies at the time of payment.
Tax rules 2026: As India transitions from the Income-tax Act, 1961, to the new Income Tax Act, 2025, from April 1, 2026, salaried employees are likely to see immediate changes in how their salary is taxed. One of the most important—and often misunderstood—aspects of this shift is how Tax Deducted at Source (TDS) will be applied during the transition period.
Payment date
According to the Income Tax Department, the key factor is not when the salary is earned, but when it is paid.
Salary for March 2026, if paid on or before March 31, 2026, will be governed by the Income-tax Act, 1961
Salary for April 2026, paid on or after April 1, 2026, will fall under the Income Tax Act, 2025
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