NEW ITR-B Form To Disclose-UnDisclosed Income
A. Introduction
The Ministry of Finance has officially announced the introduction of Form ITR-B for the financial year 2025-26 (assessment year 2026-27) through a gazetted notification from the Central Board of Direct Taxes (CBDT) dated April 7, 2025. This new form is a significant development in the realm of income tax compliance, particularly aimed at addressing previously undisclosed income that the Income Tax Department has identified during various operations such as searches, investigations, or requisitions initiated on or after September 1, 2024.
The ITR-B form serves a specific purpose in the tax filing landscape, distinct from other forms like ITR-1, ITR-2, or ITR-3. It is specifically designed for block assessment years, which means that taxpayers who are required to file this form must do so in the context of multiple assessment years. This requirement arises when an investigation or requisition has taken place, compelling the taxpayer to disclose income that was not previously reported over a specified number of assessment years. This bulk filing approach allows for a comprehensive declaration of undisclosed income, covering several years at once, rather than addressing each year individually.
For example, while taxpayers typically file the ITR-1 form for a single financial year, the ITR-B allows for the filing of undisclosed income for up to six years collectively. This streamlined process not only simplifies compliance for taxpayers but also enhances the efficiency of the tax administration in addressing undisclosed income. It is crucial for individuals and entities subject to this requirement to understand the implications of the ITR-B form and ensure timely and accurate submissions to avoid potential penalties or legal complications.
B. Important Extractions Out Of ITR-B Form:
- The deadline for filing Income Tax Returns (ITR) is generally set at 60 days following the issuance of a tax notice that arises from a search or requisition activity.
- On April 7, 2025, the Central Board of Direct Taxes (CBDT) released the ITR-B Form through notification number 30/2025, which enables taxpayers who have undergone searches to fully disclose any previously unreported income.
- Â This new form requires taxpayers to categorize their undisclosed income into specific classifications, organized by assessment year and itemized assets, which may include cash, bullion, jewelry, and virtual digital assets.
- The emphasis on detailed categorization aims to enhance transparency in the reporting process, facilitating a comprehensive evaluation of any undisclosed income by tax authorities.
- Additionally, the ITR-B Form introduces a feature that allows taxpayers to claim Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) credits against their undisclosed income, providing a potential avenue for tax relief.
- Â However, these claims are subject to verification and approval by the tax officer, who may encounter difficulties in navigating the claims process.
- Â The introduction of the ITR-B Form has elicited mixed responses from the public and tax professionals, reflecting a range of opinions on its implications.
- Overall, the ITR-B Form represents a significant step towards enhancing transparency and modernizing the process of income reporting, particularly in the context of post-search operations.
- This initiative aligns with broader efforts to digitize tax compliance and improve the efficiency of income assessments in India.
- Â As taxpayers adapt to these changes, the focus will likely remain on ensuring compliance while maximizing the benefits of the new reporting framework.
C. Significant Notes for Filing ITR-B Form
As per the notification, below is the information-
Note 1: AY Y6 to Y1
6 assessment years preceding the assessment year pertinent to the earlier year in which the search was begun u/s 132 or any requisition was incurred u/s 132A.
AY Y+0
- When a search or requisition is completed within the same year it begins, Y0 refers to the assessment period relevant to the previous year, starting from April 1 of the initiation year until the execution date of the last authorization for search or requisition.
- If the execution date of the last authorization occurs in the year immediately following the initiation year, Y0 encompasses the entire assessment year of that earlier year, beginning on April 1 of the initiation year and concluding on March 31 of that year.
AY Y+1
- (To be filled in case the date of execution of the last of the authorization’s for search or requisition comes in a previous year after the year in which the search or requisition was initiated) Y+1 is the period in the assessment year pertinent to the aforementioned year, which will be from the 1st April of the year in which the last authorizations of search/requisition were performed and ending with the date of the last authorization of search/requisition.
