The Central Board of Direct Taxes (CBDT) has rolled out a new tax return form. It is called ITR-BN. This form applies to taxpayers facing block assessment proceedings. These proceedings arise from search and seizure actions. Consequently, taxpayers under investigation now have a dedicated compliance route.
The change comes through the Income-tax (Third Amendment) Rules, 2026. The Ministry of Finance notified this amendment on July 24, 2026. As a result, the new rules carry real weight for affected taxpayers.
What Is ITR-BN?
ITR-BN stands for the Block Notification return form. It is designed specifically for block assessment cases. These cases fall under Chapter XVI-B of the Income-tax Act, 2025. Therefore, this form does not apply to regular annual returns.
The form requires detailed information about search proceedings. Taxpayers must disclose both declared and undisclosed income. Additionally, they must report assets held during the block period. This approach aims to standardise reporting across all cases.
Why CBDT Introduced This Form
The Income Tax Act, 2025 created a new framework for search-related assessments. However, this framework needed an operational mechanism. ITR-BN now fills that gap effectively.
Officials expect the form to streamline assessment procedures. It will also standardise disclosures across cases. Furthermore, it should improve administration of search and seizure matters overall.
Notably, <cite index=”6-1″>the amendment relies on powers granted under section 294 read with section 533 of the Income-tax Act, 2025</cite>. This legal backing gives the form clear statutory authority.
Key Details Required in the Form
Taxpayers must furnish several important details in ITR-BN. For instance, <cite index=”2-1″>the form asks for the date search or requisition began, and the date authorities executed the last search authorisation</cite>. It also requires the block period and notice particulars under Section 294.
Moreover, taxpayers must disclose returns already filed for each year. This covers the entire block period. They must also mention the statutory provisions used and acknowledgment numbers. Similarly, details of pending assessments need disclosure, under both the old and new tax laws.
The form also asks for item-wise disclosure of undisclosed income. This includes gold, bullion, jewellery, and virtual digital assets. Hence, taxpayers should keep thorough records ready before filing.
Two Computation Scenarios
Interestingly, ITR-BN accounts for two different situations. First, it covers cases where search proceedings conclude within one tax year. Second, it addresses cases stretching into the following year. Separate computation tables exist for each scenario, which helps avoid confusion during filing.
Tax Computation Rules Under ITR-BN
Part E of the form governs tax computation for undisclosed income. Specifically, <cite index=”6-1″>the form provides for computation of tax at 60 per cent of the undisclosed income of the block period, along with applicable surcharge, Health and Education Cess at four per cent, and interest payable under section 298(1)</cite>. This rate applies uniformly across block assessment cases.
The form also accounts for taxes already paid. It includes dedicated schedules for self-assessment tax and advance tax. TDS and TCS credits also get separate treatment. However, the Assessing Officer must verify all such claims before approval.
When Does This Apply?
The notified rules took effect from April 1, 2026. They apply whenever authorities initiate a search under section 247. They also apply when authorities issue a requisition under section 248. Both provisions fall under the Income-tax Act, 2025.
Therefore, only searches and requisitions from this date onward attract ITR-BN. Older cases may follow different procedures under earlier laws.
What This Means for Taxpayers
Taxpayers facing block assessment should study this form carefully. Meanwhile, tax professionals must update their filing processes accordingly. Since disclosure requirements are detailed, accuracy becomes essential during preparation.
Furthermore, the form’s structure reflects the government’s push for transparency. Search and seizure cases often involve large-scale investigations. Thus, standardised reporting benefits both taxpayers and tax authorities alike.
Conclusion
The notification of ITR-BN marks a significant step forward. It operationalises the block assessment framework under the Income-tax Act, 2025. Taxpayers involved in search or seizure proceedings should familiarise themselves with this form soon.
As search assessment processes continue evolving, ITR-BN will likely become central to compliance. Staying updated with CBDT notifications remains crucial for professionals and taxpayers alike.
Recent Comments