Tax dept introduces new ITR for disclosure of ‘undisclosed’ income found in raids
NEW DELHI: The income tax department has notified a new Income Tax Return form --ITR-B -- for declaring undisclosed income under the block assessment scheme, a procedure for assessing undisclosed income discovered during a search or requisition. Under the block assessment scheme, the income is assessed for a block period of six years.
The purpose of introduction of a new form is to address some of these procedural ambiguities related to block assessments.
The form mandates taxpayers to disclose undisclosed income comprehensively, categorising it under various heads of income, assessment year wise within the block period and item wise assets, such as money, bullion, jewellery, virtual digital assets, etc.
“This granular categorisation aims to enhance transparency, ensuring that the scope of undisclosed income is effectively assessed,” says Sandeep Jhunjhunwala, M&A Tax Partner at Nangia Andersen LLP.
According to Rajat Mohan, senior partner, AMRG & Associates, for the first time since 2003, the Income Tax Department is reintroducing a dedicated return form for block assessment filings. “CBDT’s introduction of Form ITR-B revives a practice that ended when Form 2B was abolished in 2003. This new form modernizes compliance by leveraging digital, data-driven governance for search-related cases,” he says.
The form stipulates electronic filing but simultaneously requires details such as stamp receipt number, seal and manual signatures of the receiving official within the verification tab.
This discrepancy may create procedural confusion, undermining the form's objective of seamless digital compliance, says Jhunjhunwala, adding that immediate rectification of this inconsistency is essential to eliminate potential procedural ambiguities.
Form ITR-B also enforces strict scrutiny of any tax credits claimed on such undisclosed income, ensuring every tax payment credit is properly verified by authorities.