The Ministry of Finance has notified a new income tax return form ‘ITR-B’ for those individuals who need to disclose previously undisclosed income detected in searches or requisition operations on or after September 1, 2024.
The new form is aimed at addressing some of these procedural ambiguities related to block assessments, the Central Board of Direct Taxes (CBDT) said in a notification issued on April 7.
“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 1st day of September, 2024 shall be in the Form ITR-B and be verified in the manner,” the CBDT notification said.
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Block assessment is a special method used by the income tax department to check for hidden or undisclosed income. It usually comes into play after a search or raid in which tax officials find proof of an income that is not disclosed in regular tax returns. This process helps tax officials assess income that may have been concealed over several years.
Unlike other ITR forms, ITR-B is filed for block assessment years. So once search or requisition operations are conducted against an individual, he or she needs to file ITR for the undisclosed incomes for a specified number of assessment years in bulk. Instead of filing returns for just one financial year like we do with ITR-1, ITR-B is used to file returns for multiple years together — usually for 6 years before the year in which the search happened. So, it’s like declaring all hidden income from the past years in one go.