Section 297 of the Income-tax Act, 1961: Repeals and Savings
Section 297 explains what happened to existing assessments, proceedings, rights, obligations, rules and recoveries when the Income-tax Act, 1961 replaced the Indian Income-tax Act, 1922. From 1 April 2026, a new transition is governed principally by Section 536 of the Income-tax Act, 2025.
What are repeal and savings provisions?
Repeal means the legislative withdrawal of an earlier enactment. A savings clause specifies which acts, rights, liabilities, proceedings, remedies and subordinate instruments survive that repeal. Such clauses prevent legal uncertainty when one tax law replaces another.
Assessment generally refers to the statutory determination of taxable income and tax liability. Reassessment concerns a fresh statutory examination where the applicable law permits it. Appeal is a prescribed challenge to a tax decision. A notification is an instrument issued by an empowered authority under the relevant statute.
Section 297 of the Income-tax Act, 1961
Sub-section (1) expressly repealed the Indian Income-tax Act, 1922. Sub-section (2) then preserved specific matters arising under that repealed enactment. These provisions principally concern the historical transition in 1962, rather than the transition introduced in 2026.
Principal savings under Section 297(2)
- Returns and assessments: clauses (a) and (b) addressed returns filed before and after commencement in respect of earlier assessment years.
- Pending litigation: clause (c) preserved pending appeals, references and revisions.
- Escaped income: clause (d) dealt with notices and proceedings concerning income escaping assessment.
- Companies and penalties: clauses (e), (f) and (g) dealt with specified company assessments and penalties relating to the 1962 transition.
- Options and declarations: clause (h) preserved elections and declarations under corresponding provisions.
- Interest and recovery: clauses (i) and (j) addressed interest, refunds, defaults and recovery of earlier dues.
- Continuing instruments: clauses (k) and (l) saved compatible agreements, appointments, approvals, rules and certain notifications.
- Expired limitation: clause (m) prevented the new enactment alone from reviving certain time-barred remedies.
Income-tax Act, 2025: Section 536 (Repeal and Savings)
Section 536(1) repeals the Income-tax Act, 1961 with effect from 1 April 2026. Its detailed savings provisions preserve the operation of the old law for specified earlier tax years and other matters. This is the principal current provision to consult for the transition from the 1961 Act to the 2025 Act.
| Issue | General transitional treatment |
|---|---|
| Tax years beginning before 1 April 2026 | Proceedings, including assessments, reassessments, rectification, penalties and appeals, generally continue under the saved provisions of the 1961 Act. |
| Pending appeals or proceedings | Proceedings relating to earlier years are preserved and ordinarily continue under the earlier applicable procedure. |
| Existing rights and liabilities | Repeal does not itself extinguish accrued rights, obligations or liabilities. |
| Rules, approvals and notifications | Existing instruments may continue so far as consistent with the corresponding provisions of the new law and subject to the statutory savings. |
| Recovery and tax credits | Unpaid sums, eligible credits and losses are governed by the detailed conditions of Section 536, including its specific carry-forward provisions. |
| Expired filing or appeal period | The change in law does not, by itself, reopen a time limit that had already expired. |
Section 536 has detailed clauses and amendments, including transitional treatment of interest, previously allowed deductions, credits and losses. Read the Income Tax Department's current 2025 Act portal and transition FAQs together with the latest amended statutory text before applying a specific clause.
Practical illustrations
Example 1: Assessment for an earlier year
An assessment or appeal concerning a year beginning before 1 April 2026 does not become void merely because the 1961 Act has been repealed. The applicable saved provisions govern the proceeding.
Example 2: Earlier tax demand
A valid demand raised under the old law is not automatically cancelled by repeal. The statutory savings provisions allow recovery subject to the relevant law and procedural safeguards.
Example 3: Brought-forward business loss
Where a taxpayer has an eligible loss carried forward from an earlier year, Section 536 contains specific rules for its treatment under the new Act. Eligibility, duration and set-off restrictions must be verified for the type of loss.
Frequently asked questions
Is Section 297 still relevant after 1 April 2026?
Yes, principally for understanding the historical 1922-to-1961 transition and legal matters to which its savings provisions remain relevant. For the present 1961-to-2025 transition, consult Section 536 of the 2025 Act.
Are pending income-tax appeals automatically closed?
No. Repeal and savings provisions protect proceedings relating to earlier years, subject to the specific statutory rules.
Does the new Act reopen expired appeal deadlines?
Not merely by replacing the earlier Act. Section 536 includes protection against automatic revival of specified expired time limits.
Section 297: Statutory text reproduced from the original webpage
The following is the original page's historical extract of Section 297(1) and clauses (a) through (m) of Section 297(2). The uploaded extract ends partway through clause (m) and is not the complete statutory text. For exact wording and amendments, consult the official legislation linked below.
(1) The Indian Income-tax Act, 1922 (11 of 1922), is hereby repealed. (2) Notwithstanding the repeal of the Indian Income-tax Act, 1922 (11 of 1922) (hereinafter referred to as the repealed Act),-
(a) where a return of income has been filed before the commencement of this Act by any person for any assessment year, proceedings for the assessment of that person for that year may be taken and continued as if this Act had not been passed;
(b) where a return of income is filed after the commencement of this Act otherwise than in pursuance of a notice under section 34 of the repealed Act by any person for the assessment year ending on the 31st day of March, 1962, or any earlier year, the assessment of that person for that year shall be made in accordance with the procedure specified in this Act;
(c) any proceeding pending on the commencement of this Act before any income-tax authority, the Appellate Tribunal or any court, by way of appeal, reference, or revision, shall be continued and disposed of as if this Act had not been passed;
(d) where in respect of any assessment year after the year ending on the 31st day of March, 1940,-
(i) a notice under section 34 of the repealed Act had been issued before the commencement of this Act, the proceedings in pursuance of such notice may be continued and disposed of as if this Act had not been passed;
(ii) any income chargeable to tax had escaped assessment within the meaning of that expression in section 147 and no proceedings under section 34 of the repealed Act in respect of any such income are pending at the commencement of this Act, a notice under section 148 may, subject to the provisions contained in section 149 or section 150, be issued with respect to that assessment year and all the provisions of this Act shall apply accordingly;
(e) subject to the provisions of clause
(g) and clause
(j) of this sub-section,] section 23A of the repealed Act shall continue to have effect in relation to the assessment of any company or its shareholders for the assessment year ending on the 31st day of March, 1962 or any earlier year, and the provisions of the repealed Act shall apply to all matters arising out of such assessment as fully and effectually as if this Act had not been passed;
(f) any proceeding for the imposition of a penalty in respect of any assessment completed before the first day of April, 1962, may be initiated and any such penalty may be imposed as if this Act had not been passed;
(g) any proceeding for the imposition of a penalty in respect of any assessment for the year ending on the 31st day of March, 1962, or any earlier year, which is completed on or after the 1st day of April, 1962, may be initiated and any such penalty may be imposed under this Act;
(h) any election or declaration made or option exercised by an assessee under any provision of the repealed Act and in force immediately before the commencement of this Act shall be deemed to have been an election or declaration made or option exercised under the corresponding provision of this Act;
(i) where, in respect of any assessment completed before the commencement of this Act, a refund falls due after such commencement or default is made after such commencement in the payment of any sum due under such completed assessment, the provisions of this Act relating to interest payable by the Central Government on refunds and interest payable by the assessee for default shall apply;
(j) any sum payable by way of income-tax, super-tax, interest, penalty or otherwise under the repealed Act may be recovered under this Act, but without prejudice to any action already taken for the recovery of such sum under the repealed Act;
(k) any agreement entered into, appointment made, approval given, recognition granted, direction, instruction, notification, order or rule issued under any provision of the repealed Act shall, so far as it is not inconsistent with the corresponding provision of this Act, be deemed to have been entered into, made, granted, given or issued under the corresponding provision aforesaid and shall continue in force accordingly;
(l) any notification issued under sub-section (1) of section 60 [ or section 60A] of the repealed Act and in force immediately before the commencement of this Act shall, to the extent to which provision has not been made under this Act, continue in force [Provided that the Central Government may rescind any such notification or amend it so as to rescind any exemption, reduction in rate or other modification made thereunder;]
(m) where the period prescribed for any application, appeal, reference or revision under the repealed Act had expired on or before the commencement of this Act, nothing in this Act shall be construed as enabling any such application, appeal, reference or revision to be made under this Act by reason only of the fact that a longer period therefor is prescribed or provision is made for extension of time in suitable cases by the appropriate authority
Official sources and further reading
- Income Tax Department: Section 297 of the Income-tax Act, 1961
- Income Tax Department: Income-tax Act, 2025, Rules, 2026 and transition guidance
- Income Tax Department: Income-tax Act, 2025 (official published text; check subsequent amendments)
- Income Tax Department: Objective and scope of the new Act
- India Code: Central Acts and amendments
Editorial note: This article provides general legal information, not advice for an individual tax proceeding. Statutory amendments, applicable assessment or tax year, and binding decisions may affect the result.