The Central Board of Direct Taxes (CBDT) has notified a new income tax return form for block assessments arising from search and seizure cases. According to reports from Mint, the ITR-BN (income tax return for block assessment) form has been introduced under the Income-tax Act, 2025 and will take effect retrospectively from April 1, 2026. However, this return form is not meant to be filed by compliant salaried individuals or other regular taxpayers. It is applicable only to those who receive a notice for block assessment after a search or seizure action initiated by the income tax department.
Block assessment is a special procedure under the Income-tax Act used to assess undisclosed income discovered during a search, seizure, or requisition. As reported by Mint, undisclosed income may include hidden money, bullion, jewellery, valuable items, or unrecorded transaction entries and false expense claims found during a search by income tax officials. Under the new provision, this block period will be determined based on the search-related dates, including the date of initiation of the search and the date on which the final authorisation is executed. The concept of block assessment in search cases was first introduced by the Finance Act of 1995, which added Chapter XIV-B (Sections 158B to 158BH) to the Income-tax Act, effective from July 1, 1995.
The newly notified income tax return form is meant to be filed exclusively for taxpayers whose cases are covered under the block assessment provisions following search and seizure operations. According to Mint, it will apply where a search is initiated under Section 247 or a requisition is made under Section 248 of the Income-tax Act, 2025, on or after April 1, 2026. The form covers up to six tax years preceding the tax year in which search was initiated under section 247 or any requisition was made under section 248 of Income-tax Act, 2025. Taxpayers filing this new form are required to provide their general information such as PAN, Aadhaar details, contact information, residential status and other identification details.
The ITR-BN form includes a dedicated section for calculating tax payable by the person on undisclosed income, along with applicable surcharge, health and education cess and interest liability. As reported by Mint, taxpayers filing this form are required to provide details about previous income tax returns filed for years covered under the block period, including income already reported, assessment status, acknowledgement numbers and any pending assessment or reassessment proceedings. The Finance Act of 2001 later revised the definition of 'block period' to encompass six previous years, according to a Taxmann report. Undisclosed cash, property, or investments discovered during a search attract tax plus heavy penalties up to 60% of undisclosed income, making it crucial for taxpayers to maintain clean paper trails for at least 7 years.
