CBDT Launches New ITR Form for Block Assessment Taxpayers

The Central Board of Direct Taxes (CBDT) has announced the introduction of a new Income Tax Return (ITR) form specifically designed for taxpayers involved in block assessment proceedings following search and seizure operations. This new form, designated as ITR-BN (Income Tax Return for Block Assessment), has been officially notified under the Income-tax Act, 2025, and will be applicable retroactively starting from April 1, 2026. It is important to note that this form is not intended for the general taxpayer population, including salaried individuals or those who typically file standard forms such as ITR-1 or ITR-2. Instead, the ITR-BN is exclusively aimed at individuals or entities that have received a notice for block assessment as a result of the Income Tax Department's search, seizure, or requisition activities. The introduction of this form is part of an effort to establish a dedicated reporting framework for undisclosed income that may be identified during such tax proceedings.

Block assessment serves as a specialized assessment mechanism utilized by tax authorities to ascertain undisclosed income that has been revealed during search, seizure, or requisition actions. Unlike traditional assessments that evaluate each year separately, block assessments allow the department to review multiple years collectively under a single framework. The undisclosed income that may be assessed through this process can encompass a variety of assets, including unaccounted cash, bullion, jewelry, and other valuables, as well as unrecorded business transactions or fraudulent expense claims that have come to light during tax searches. According to the provisions of the Income-tax Act, 2025, the relevant block period will be established based on the timing of search-related events, specifically the date on which the search commences and when the final authorization is executed.