Chapter III of the Income-tax Act, 2025 runs from section 11 to section 12 and covers incomes which do not form part of total income. Its 2 sections replace 3 sections of the Income-tax Act, 1961. This guide gives the complete section-by-section mapping between the two Acts.
What Chapter III covers
Chapter III is the shortest chapter in the Act and one of the most consequential. It holds the exemption regime — what the 1961 Act packed into section 10 — but the actual lists now live in Schedules II to VII, with political parties and electoral trusts dealt with separately.
Chapter III contains 2 sections (sections 11 to 12). Between them they carry forward the substance of 3 sections of the Income-tax Act, 1961.
The Income-tax Act, 2025 received Presidential assent on 21 August 2025 and takes effect from 1 April 2026. The Income-tax Act, 1961 continues to govern every tax year up to 31 March 2026, and all assessments, appeals, penalties and prosecutions relating to those years are completed under the old Act by virtue of the repeal and savings provision in section 536. The mapping on this page is drawn from the section-wise concordance published with the Act, including the corrigenda notified in the Gazette on 3 September 2025.
What changed in Chapter III
- Section 11 replaces section 10, but it is a gateway section: the exempt items themselves are set out in Schedules II to VII, arranged by the kind of person claiming them.
- Schedule II carries income not included in total income generally; Schedule III covers eligible persons; Schedule IV covers eligible non-residents and foreign companies; Schedule V covers investment funds, business trusts and their unit holders; Schedule VI covers IFSC units; and Schedule VII lists persons wholly exempt from tax.
- Section 12 replaces sections 13A and 13B and is read with Schedule VIII for political parties and electoral trusts.
- Because the lists moved into tables, an exemption is now found by looking up who you are first and what the income is second — the reverse of how section 10 was usually read.
Chapter III: complete section mapping (2025 → 1961)
Every section of Chapter III is listed below with the section or sections of the Income-tax Act, 1961 that it corresponds to. Where a section is marked as read with a Schedule, the operative detail sits in that Schedule rather than in the section itself.
| New section (2025) | Provision | Corresponding 1961 section(s) |
|---|---|---|
| 11 | Incomes not to be included in total income (Read with Schedules II to VII) | 10 |
| 12 | Incomes not to be included in total income of political parties and electoral trusts (Read with Schedule VIII) | 13A, 13B |
How to use this mapping
- Working on a year up to 2025-26? Use the 1961 section in the right-hand column. The old Act governs those years under section 536.
- Working on tax year 2026-27 onwards? Use the new section number in the left-hand column, and read the section text rather than assuming the old provision was copied verbatim.
- Drafting a reply or an appeal? Cite the section that applies to the year in dispute, not the section in force when you are writing.
- Updating templates and software? Sections that merged — shown where one new section maps to several old ones — need the most attention, because a single new provision now carries what were separate conditions.
This page is a structural mapping guide, not tax advice. A corresponding section is not always an identical section — several provisions were merged, split or re-worded when they were carried over. Always read the actual text of the new section before relying on it, and check for later amendments, rules and CBDT notifications.