ITR-B for Block Assessments
Background: Search & Requisition Assessments Resurrected
In a significant legislative move, the Finance (No. 2) Act, 2024 reintroduced the block assessment mechanism for income tax searches and requisitions. This mechanism, governed by Chapter XIV-B of the Income Tax Act, 1961, had been dormant since 2003. The rationale behind its comeback is to provide a distinct and focused tax computation regime for undisclosed income unearthed during search operations.
To implement this system, a dedicated return form ITR-B was promised. After months of anticipation, CBDT has now notified ITR-B via gazette Notification No. 30/2025, dated 07th April 2025.
Concept of ITR-B
ITR-B is a specialized income tax return form meant exclusively for cases covered under Section 158BC, which deals with search or requisition assessments conducted under:
- Section 132 (Search & Seizure), or
- Section 132A (Requisition of Books or Assets) on or after 01st September, 2024.
This form is not for regular income but rather to report “undisclosed income” for block period of last six years preceding the year in which a search was initiated or a requisition was made and an additional period starting from April 1st of the previous year in which the search was initiated or requisition made up to the date of execution of the last authorization or requisition.
When to Use ITR-B?
The taxpayer (or legal representative) must file ITR-B when a search or requisition has taken place. If the return of income required to be furnished by any person under clause (a) of sub-section (1) of section 158BC, relating to any search initiated under section 132 or requisition made under section 132A on or after the 01st September 2024.
It should be noted that only income discovered during search or requisition proceedings is to be reported here. There is no need to report the income from regular business, salary, or capital gains income, if already disclosed in earlier ITRs.
What Does ITR-B Contain?
The ITR-B form contain following parts:
| Parts | Details Required |
| A | General info (search date, block period, past ITR status) |
| B | Reporting of undisclosed income (from books/documents in head wise) |
| C | Reporting of undisclosed income (assessment year wise) |
| D | Breakup of undisclosed income (head-wise & assessment year wise) |
| E | Tax computation (60% flat rate + surcharge, Interest payable (if any) |
| F-H | Tax payments (advance tax, TDS, self-assessment) |
The form also includes verification statements and space to report pending appeals or legal proceedings, if any.
Taxation of Undisclosed Income: Section 113 in Focus
All income reported in ITR-B is taxed at a flat rate of 60% under Section 113 (plus applicable surcharge and cess). Deductions under Chapter VI-A or set-off of losses are not allowed. This ensures that all hidden or unreported income faces heavy taxation, reflecting the intent to penalize concealment.
Legal Implications & Strategic Filing
The filing of ITR-B is a compliance opportunity and can help taxpayers reduce litigation risks if done truthfully and timely. However, misreporting or underreporting can attract further penalties, reopening of other assessments, or prosecution under Sections 277 & 278.
Hence, professional assistance is highly recommended in preparing and filing ITR-B.
To Download Official Notification, Click Here
ITR-B for Block Assessments
Need Help with ITR-B Filing?
At Taxunplug, we specialize in representation and compliance for search and seizure cases. From understanding your block period to accurately disclosing income and ensuring proper legal strategy, our expert team is here to support you.
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