The Central Board of Direct Taxes (CBDT) has notified a new income tax return form, ITR-BN, for taxpayers covered under block assessment proceedings arising from search and requisition actions under the Income Tax Act, 2025.
The change has been introduced through the Income-tax (Third Amendment) Rules, 2026, notified by the Ministry of Finance on July 24, 2026. The notification inserts a new Appendix 4 into the Income Tax Rules, 2026 and prescribes ITR-BN as the return form to be used for block assessments.
What Does the Notification Say?
As per the notification, Rule 332 of the Income Tax Rules, 2026 has been amended to include a new Appendix 4. This appendix contains the format of ITR-BN, a dedicated return form for block assessment proceedings relating to search and seizure cases. The rules are deemed to have come into force from April 1, 2026 and apply to searches initiated under Section 247 or requisitions made under Section 248 of the Income Tax Act, 2025.
What is ITR-BN?
ITR-BN is a specialized return form designed for taxpayers who are subject to block assessment proceedings following a search, seizure, or requisition action by the tax authorities.
The form seeks detailed information regarding:
- Search or requisition proceedings
- Block period covered under assessment
- Previously filed income tax returns
- Income declared for relevant assessment years
- Undisclosed income detected during the block period
- Details of assets, transactions, and other income-related disclosures
The form is specifically meant for cases covered under Chapter XVI-B dealing with search-related assessments.
Applicability of the New Form
The notification makes it clear that the new provisions apply to searches initiated on or after April 1, 2026 under Section 247 and requisitions under Section 248 of the Income Tax Act, 2025. Taxpayers falling within the scope of block assessment proceedings will be required to furnish details in the newly prescribed ITR-B format.
Key Information Required in ITR-BN
The newly notified form captures extensive information including:
- Personal and identification details of the taxpayer
- Search initiation and authorization details
- Details of notices issued under the Income Tax Act, 2025
- Return filing history for assessment years falling within the block period
- Income from salary, house property, business, capital gains, and other sources
- Computation of undisclosed income identified during the block assessment process
- Information relating to valuable assets, virtual digital assets, expenditure claims, deductions, and exemptions wherever applicable
The comprehensive format is intended to facilitate assessment of income discovered during search proceedings and ensure uniform reporting across block assessment cases.
Why This Matters
The Income Tax Act, 2025 introduced a new framework for search-related assessments. With the notification of ITR-BN, CBDT has now provided the operational mechanism for reporting income and undisclosed assets in block assessment cases.
The move is expected to streamline assessment procedures, standardize disclosures, and improve administration of search and seizure cases under the new tax law regime.
Conclusion
The notification of ITR-BN marks another important step in the implementation of the Income Tax Act, 2025. Taxpayers facing block assessment proceedings arising from search or requisition actions should familiarize themselves with the new form and the information requirements prescribed by CBDT. As search assessment procedures evolve under the new law, ITR-B is set to become a key compliance document for affected taxpayers.
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