The ICAI's announcement of the introduction of the Income Tax Act, 2025, will mean that students taking the Chartered Accountancy (CA) exam starting in May 2027 will have to start preparing for many changes to the current structure of direct taxation in India. An evolutionary step in the direct taxation legislative framework is the introduction of a Tax Year, which will replace the earlier concepts of Previous Year and Assessment Year.
This article will illustrate what Tax Year falls under the Income Tax Act, 2025; why it is significant for students who are taking the CA exams from May 2027 onwards; and how to prepare for this new material based on the appropriate ScannerAdda resources for each stage/level of the examination process.
Meaning of Tax Year under Income-tax Act, 2025
According to the 2025 Income Tax Act, a tax year is a 12-month period beginning on April 1st and ending on March 31st of the following calendar year. All income derived during this 12-month period will be taxed within that tax year.
This simplified definition eliminates the need for taxpayers and students to differentiate between the "year of earning" and the "year of assessment" when calculating their taxes. The government is placing a heavy emphasis on the tax year definition, which will likely be an area of frequent testing in CA Foundation examinations starting in May 2027.
Applicability for CA Exams from May 2027
As clarified by ICAI:
- Income-tax Act, 1961 will be applicable till November 2026
- Income-tax Act, 2025 will be applicable from May 2027 onwards including Tax Year Provision.
Hence, students appearing for the CA Foundation Course, CA Intermediate Course & CA Final Course from May 2027 need to study Taxation strictly as per new Act.
Thus, students need to transition to New Scanner CA Foundation, Scanner CA Intermediate & Scanner CA Final Book Editions aligned with the revised syllabus.
Why Tax Year Is an Important Exam Topic
Tax Year represents a more "properties" based concept rather than just calling it a term. It also serves as a basis for calculating income and taxation. The ICAI will likely assess applicants on this subject matter through many different ways, including the following:
- Direct definition questions
- Conceptual MCQs
- Case-study based scenarios
- Practical problems involving year of taxability
The CA Foundation Scanner, CA Intermediate Scanner, and CA Final Scanner are useful for preparing for these different types of questions.
Tax Year Topics for CA Foundation (May 2027 Onwards)
The CA Foundation offers an opportunity to gain a basic level of understanding in the listed essential areas of tax, as follows:
- Definition of Tax Year
- Tax Year vs Financial Year
- Difference between Previous Year and Tax Year
- Simple illustrations of income earned during a Tax Year
A CA Foundation Scanner helps students practice and revise using Past Year Papers (PYQ), revision tests Paper (RTP), mock tests Paper (MTP), ICAI study modules, and model questions.
The Tax Year concept is used in the practical situations related to Tax Year at CA Intermediate. Some of these include:
- Tax Year for New Businesses
- Tax Year if a Business has been Discontinued
- Tax Income of an individual based on Receipt Basis or Accrual
- Tax Year applicable to special situations.
The Updated Scanner CA Intermediate textbooks include the topics mentioned above and have exam relevant examples and case studies.
Advanced Tax Year Issues Related to CA Final Taxation
The Tax year in CA finally encompasses advanced taxation issues. Important topics to be familiar with are:
- The tax year in relation to international taxation
- The tax year in the context of reassessment proceedings
- The tax year pertaining to search and seizure cases
- Transitional provisions of the Income Tax Act of 2025 and the Income Tax Act of 2020
CA Final Scanner books should be consulted to assist with understanding fully, and working through complex exam questions.
Role of Scanner Books in Preparing for Tax Year
Selecting the correct study materials when there is a brand new Income-tax law taking effect is imperative for preparing for the exams under this new law. Scanner provides resources for students to facilitate their transition to this new law through:
- Chapter by Chapter Tax Year Topic Coverage
- Expected Questions on Exams Based on ICAI Trends
- Combination of ICAI's Study Materials, Revision Test Papers (RTP), and Mock Test Papers (MTP)
- Exam-oriented answer for rapid review.
Scanner has provided specific CA Foundation Books, CA Intermediate Books, and CA Final Books for students to have the tools needed to prepare effectively and efficiently for the exam.
Preparation Strategy for Students
- Instead of memorizing, you should focus on understanding the material conceptually.
- Regularly practice different categories of questions including distinguish-between questions, descriptive questions, and compulsory questions.
- Check regularly for clarity within ICAI's notifications and syllabus.
- Be sure to use editions of your scanner that correspond to ICAI's latest dates.
- Tax Year topics should be reviewed often since they usually lead to the highest point totals.
Conclusion
The new concept of Tax Year introduced by the Income-tax Act, 2025, effective for CA exams from May 2027 onwards, will completely transform how we look at Indian Taxation. The Tax Year will provide a clearer understanding of the current legislation, and will make it easier for students seeking to prepare for CA Foundation, CA Intermediate, and CA Final Examinations.
By using the ScannerAdda Study Materials to learn Tax Year concepts, students will have the ability to learn Tax Year concepts with confidence in order to achieve effective results under the new Tax regime.
