The Central Board of Direct Taxes has introduced the ITR-BN form for taxpayers undergoing block assessments following search and seizure operations. Effective from April 1, 2026, this dedicated form streamlines the disclosure of undisclosed income and tax liabilities under the Income-tax Act, 2025. It mandates comprehensive reporting of assets and expenditures to ensure compliance in investigation-related cases.
Detailed Coverage
The Central Board of Direct Taxes (CBDT) has officially notified a new income tax return form, ITR-BN, specifically designed for taxpayers who are subject to block assessment proceedings. This follows search and seizure actions initiated or requisitions made on or after April 1, 2026, under the updated framework of the Income-tax Act, 2025.
Reporting Undisclosed Income
The ITR-BN form replaces the previous practice of using standard return formats for investigation cases. It acts as a dedicated channel for reporting undisclosed income identified during the block period, which generally spans up to six preceding tax years. The form requires taxpayers to provide granular details across various income heads, including salary, business income, house property, and capital gains.
Beyond basic income reporting, the form mandates specific disclosures regarding assets. Taxpayers must provide itemized information on bullion, jewelry, cash, and virtual digital assets. Additionally, the form requires documentation of unexplained expenditures, incorrect claims, and income sourced from undisclosed books of account or documents. By segregating these disclosures, the tax department aims to simplify the reconciliation of tax liabilities in complex cases.
Mandatory Filing Requirements
This filing requirement applies to individuals and entities facing searches under Section 247 or requisitions under Section 248 of the Income-tax Act, 2025. Along with financial data, the form demands comprehensive personal details, including PAN, Aadhaar information, and residential status. Taxpayers are also required to provide a history of previously filed returns for the block period, including the status of any pending tax proceedings.
Tax Liability and Compliance
A critical component of the ITR-BN form is the structured calculation of tax liabilities on undisclosed income. The form includes specific sections to factor in applicable surcharges, interest, and cess. It also provides space for taxpayers to claim credit for taxes already paid, such as advance tax, self-assessment tax, and any Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) that was not claimed in original filings.
For taxpayers, the introduction of ITR-BN means a more specialized approach to post-search compliance. Because the form is tailored to the specific nature of block assessments, it aims to reduce ambiguity in reporting. Investors and business owners should note that the CBDT has confirmed these rules are effective from April 1, 2026, and the primary focus remains on aligning reporting standards with the provisions established in the Income-tax Act, 2025. The next step for affected taxpayers will be ensuring that all undisclosed asset disclosures and tax calculations are reconciled accurately within this new format to avoid further scrutiny during the assessment process.