ITR-BN: The New Return Form for Block Assessments
What CBDT has done:
On 24 July 2026, CBDT has notified the Income-tax (Third Amendment) Rules, 2026 (Notification 97/2026), introducing Form ITR-BN for block assessment in search and requisition cases.
It is deemed effective from 1 April 2026, so it already governs every search initiated under section 247 or requisition under section 248 from the start of this tax year. Rule 180 prescribes the form, Rule 332 carries its format, and it is filed in response to a section 294 notice, including section 295 cases against other persons.
Filing window and tax rate:
Section 294 requires the Assessing Officer to specify the filing period in the notice. That period cannot exceed 60 days.
Section 192(1) charges the total undisclosed income of the block period, as determined under section 294, to tax at a flat 60 per cent. Section 192(2) adds that this is increased by surcharge, if any, levied by a Central Act. Cess applies on top.
What the form demands:
Dates of initiation and of the last authorisation executed.
The block period.
Notice particulars and DIN.
Every return already filed for each tax year inside the block, with the provision under which filed and the acknowledgment number.
Pending assessments and reassessments under both the 1961 Act and the 2025 Act.
Then a full computation of undisclosed income, extending to valuable assets, virtual digital assets, expenditure claims, deductions and exemptions.
Put simply, the form asks the assessee to reconstruct the entire compliance history of the block period before the Department has to prove anything.
The provision that will generate the litigation:
Rule 180(4). Where credit is claimed against undisclosed income of the block period otherwise than by way of self-assessment tax for that period, the claim and its allowability are subject to verification by and the satisfaction of the Assessing Officer.
Read plainly, TDS, TCS and advance tax credit in a block assessment is not automatic. It sits at the Assessing Officer’s discretion. That is a meaningful shift in bargaining position, and it means the reconciliation has to be built and documented before the return goes in, not defended at hearing after credit is denied.
The copy of the Notification is as under:
