The notification issued by the Ministry of Finance on July 24, 2026 amended the Income-tax Rules, 2026 by adding a new Appendix IV under Rule 332.
The form provides a specific format for reporting income details, undisclosed income and tax liability in cases where the Income Tax Department undertakes search and seizure proceedings.
What is ITR-BN?
ITR-BN is a dedicated return form for block assessment cases. A block assessment is initiated after a search or requisition action by the tax department to examine undisclosed income related to a defined period.
The form will be used by taxpayers to submit details required for assessment of undisclosed income under the block assessment provisions of the Income-tax Act, 2025.
Who needs to file this form?
The form will apply in cases 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 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.
Details covered under ITR-BN
The form requires taxpayers to provide general information such as PAN, Aadhaar details where applicable, contact information, residential status and other identification details.
It also seeks information about earlier income tax returns filed for years covered under the block period. Taxpayers will need to provide details of income declared, assessment status, acknowledgement numbers and any pending assessment or reassessment proceedings.
The form covers up to six preceding tax years along with the relevant period in which the search was initiated. In certain cases, details of an additional period may also be required if the final search authorisation falls in a subsequent tax year.
Reporting undisclosed income
A major section of the form deals with computation of undisclosed income identified during the block period.
Taxpayers will have to report undisclosed income under different categories, including salary, house property income, business or professional income, capital gains and income from other sources.
The form also requires item-wise disclosure of undisclosed income, including money, bullion, jewellery, valuable articles, virtual digital assets, unexplained expenditure, incorrect claims of expenses, exemptions, deductions or allowances, and income based on books of accounts or documents.
Tax calculation and payment details
The ITR-BN form includes a section for calculating tax payable on undisclosed income, along with applicable surcharge, health and education cess and interest liability.
Taxpayers can also provide details of taxes already paid, including self-assessment tax, advance tax and eligible TDS or TCS credits that have not been claimed earlier.
Significance of the new form
The introduction of ITR-BN creates a separate reporting mechanism for search-related assessments under the new income tax framework. It replaces the need to adapt regular return formats for cases involving block assessments and brings the reporting requirements in line with the provisions of the Income-tax Act, 2025.
The CBDT notification states that the amendments will be effective from April 1, 2026. It also clarifies that the retrospective application of the notification does not adversely impact any taxpayer.
