New ITR-B Form: A Comprehensive Guide to Filing Deadlines, Eligibility, and Key Updates 

The Ministry of Finance, through a CBDT notification (30/2025) dated April 7, 2025, introduced the Income Tax Return - B (ITR-B) Form—a significant update to income tax compliance for taxpayers undergoing search, investigation, or requisition operations. This form streamlines the disclosure of previously undisclosed income detected during such proceedings initiated on or after September 1, 2024. Below is a detailed breakdown of the form’s purpose, eligibility, filing process, and critical notes for taxpayers. 

What is the ITR-B Form? 

The ITR-B Form is a specialized return designed for taxpayers identified by the Income Tax Department during search operations (under Section 132) or requisition proceedings (under Section 132A). Unlike regular ITR forms (e.g., ITR-1, ITR-2), which are filed annually, ITR-B caters to block assessment years. This means taxpayers must disclose undisclosed income across multiple assessment years collectively rather than filing separate returns for each year. 

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For instance, if a search operation uncovers undisclosed income spanning six years, the taxpayer must file ITR-B for all six years in a single submission. This approach simplifies compliance but demands meticulous reporting of income, assets, and taxes across the block period. 

Key Features of ITR-B 

1. Block Assessment Framework: 

   - ITR-B covers income not disclosed during six assessment years preceding the year of the search/requisition, plus the current and subsequent years if applicable. 

   - Example: If a search begins in FY 2025-26 (AY 2026-27), the taxpayer must report undisclosed income for AY 2020-21 to AY 2026-27 (six prior years and the current year). 

2. Filing Deadline: 

   - The return must be filed within 60 days from the date of the tax notice issued post-search/requisition. 

3. Detailed Disclosure Requirements: 

   - Taxpayers must classify undisclosed income under relevant heads (e.g., salary, capital gains) and specify assets like cash, jewelry, bullion, or virtual digital assets. 

   - Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) credits can be claimed, subject to verification by tax authorities. 

4. Provisional Income Reporting: 

   - For ongoing assessment years where the regular ITR deadline (under Section 139(1)) has not passed, provisional figures based on existing books of accounts can be submitted. However, this does not replace the regular ITR filing. 

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Eligibility and Requirements 

The ITR-B Form is mandatory for individuals or entities subjected to: 

- A search under Section 132 (authorization to enter premises, inspect assets, etc.). 

- A requisition under Section 132A (seizure of assets by other government agencies). 

Once notified, taxpayers must disclose all previously unreported income and assets identified during the operation. Failure to comply may lead to penalties or prosecution under the Income Tax Act. 

Critical Notes for Filing ITR-B 

The CBDT notification outlines four essential notes to guide taxpayers: 

1. Assessment Year Classification: 

   - Y6 to Y1: Six years preceding the search year. 

   - Y0: The assessment year in which the search concludes. If the search spans multiple financial years, Y0 is the full year in which it began. 

   - Y+1: Applicable if the search concludes in the subsequent financial year, covering the period up to the date of the last authorization. 

2. Provisional Reporting for Pending Returns: 

   - If the regular ITR deadline for an assessment year (e.g., Y1 or Y0) has not expired, taxpayers may submit provisional income figures. These are not a substitute for the regular ITR but must be included in the final filing under Section 139(1). 

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3. Exclusion of International/Domestic Transactions: 

   - Undisclosed income from international or specified domestic transactions (covered under transfer pricing laws) must be computed separately and excluded from ITR-B. 

4. Verification and Scrutiny: 

   - All disclosures are subject to verification by tax authorities. Discrepancies may trigger further scrutiny or audits. 

Implications and Challenges 

The introduction of ITR-B reflects the government’s push for transparency and digitization in tax compliance. By consolidating disclosures across multiple years, the form reduces administrative burdens but increases the complexity of reporting. 

- Pros: 

  - Streamlines post-search assessments. 

  - Encourages voluntary disclosure of undisclosed assets. 

  - Aligns with global standards for tax transparency. 

- Cons: 

  - Complexity in collating multi-year financial data. 

  - Provisional reporting may lead to errors if not reconciled with regular ITRs. 

  - Limited clarity on claiming TDS/TCS credits, which depend on tax officer discretion. 

Conclusion 

The ITR-B Form marks a paradigm shift in how undisclosed income is reported post-search operations. Taxpayers must act swiftly within the 60-day window and ensure meticulous documentation of income, assets, and taxes across the block period.

Consulting tax professionals is advisable to navigate the form’s intricacies and avoid penalties. 

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