Finance ministry notifies form ITR-B to report undisclosed income

The finance ministry on Tuesday notified Form ITR-B through the gazette which needs to be filed by taxpayers who need to reveal any previously undisclosed income caught in an income tax search or requisition operation on or after September 1, 2024 through block assessment.

 

“Unlike the detailed disclosures necessitated in conventional ITR forms, Form ITR-B calls for limited data specifically related to the block assessment period. This ensures that taxpayers are not overburdened with compliance requirements while ensuring precision in data reporting,”said Sandeep Jhunjhunwala, M&A tax partner, Nangia Andersen LLP.

 

The block assessment process in income tax refers to a special procedure used by tax authorities to assess the undisclosed income of a taxpayer, typically when there is evidence of concealed or undisclosed income over a period of time. This process is primarily used in cases of search and seizure operations, where tax authorities find evidence of unaccounted income that is not reported in regular income tax returns.

 

Form ITR-B allows the assessee to claim TDS (tax deducted at source) and TCS (tax collected at source) credit against undisclosed income.

 

Such claims, however, remain subject to verification and satisfaction of the tax officer, which could pose challenges in cases of incomplete documentation, Jhunjhunwala said.

 

“Although the digitisation of Form ITR-B filing is a commendable effort, an apparent contradiction surfaces in its verification section. 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,” added Jhunjhunwala.