Finance Bill 2025 introduces several changes to the block assessment provisions under Chapter XIV-B of the Income-tax Act, 1961, which govern search and requisition cases. The block period is defined as the previous six assessment years before the search and requisition, as well as the period starting from the 1st day of the previous year of the search until the last authorization is executed. The time limit for completing block assessments has been extended from 12 months from the execution of the last authorization to 12 months from the end of the quarter in which the last authorization is executed. The definition of undisclosed income now includes virtual digital assets in addition to money, bullion, and other valuable items. If a proceeding under Chapter XIV-B is annulled in an appeal, certain assessments and reassessments will be revived. Other amendments clarify the treatment of income based on normal books of account and simplify provisions regarding income from international and specified domestic transactions during the block period.
Page Contents
- FAQs Budget 2025: Amendments proposed in provisions of Block assessment for search and requisition cases under Chapter XIV-B
- Q1. What is block period under Chapter XIV-B of the Income-tax Act,1961?
- Q.2 What was the time-limit for completing assessment under Chapter XIV-B prior to Finance Bill 2025?
- Q.3 What is the time-limit for completing assessment under Chapter XIV-B in Finance Bill 2025?
- Q.4 What is Undisclosed income under Chapter XIV-B of the Income-tax Act,1961?
- Q5. After Finance Bill, 2025, what shall stand revived under section 158BA (5) of the Income-tax Act,1961 if any proceeding initiated under Chapter XIV-B has been annulled in appeal?
- Q.6 What change has been made in the definition of undisclosed income in section 158B of Income Tax Act,1961 in Finance Bill 2025?
- Q.7 What change has been made in the computation of total income of the block period in section 158BB (1) of Income Tax Act,1961 in Finance Bill 2025?
- Q.8 What change has been made in the computation of total income of the block period in section 158BB (3) of Income Tax Act,1961 in Finance Bill 2025?
FAQs Budget 2025: Amendments proposed in provisions of Block assessment for search and requisition cases under Chapter XIV-B
Q1. What is block period under Chapter XIV-B of the Income-tax Act,1961?
Ans. Block period is the period comprising previous years relevant to six assessment years preceding the previous year in which search was initiated under section 132 or any requisition was made under section 132A and also includes the period starting from the 1st day of April of the previous year in which search was initiated or requisition was made and ending on the date of the execution of the last of the authorizations for such search or such requisition.
Q.2 What was the time-limit for completing assessment under Chapter XIV-B prior to Finance Bill 2025?
Ans. The time-limit for completion of block assessment was twelve months from end of the month in which the last of the authorisations for search or requisition has been executed.
Q.3 What is the time-limit for completing assessment under Chapter XIV-B in Finance Bill 2025?
Ans. The time-limit for completion of block assessment is twelve months from end of the quarter in which the last of the authorisations for search or requisition has been executed.
Q.4 What is Undisclosed income under Chapter XIV-B of the Income-tax Act,1961?
Ans. Undisclosed income in respect of the block period includes: –
(i) any money, bullion, jewellery, virtual digital asset or other valuable article or thing or any expenditure or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, virtual digital asset, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act; or
(ii) any expense, exemption, deduction or allowance claimed under this Act which is found to be incorrect.
Q5. After Finance Bill, 2025, what shall stand revived under section 158BA (5) of the Income-tax Act,1961 if any proceeding initiated under Chapter XIV-B has been annulled in appeal?
Ans. The assessment or reassessment or recomputation or a reference or an order relating to any assessment year which has abated under sub-section (2) or subsection (3), shall revive.
Q.6 What change has been made in the definition of undisclosed income in section 158B of Income Tax Act,1961 in Finance Bill 2025?
Ans. The term “virtual digital asset” has been added in the definition of undisclosed income in section 158B of Income Tax Act,1961 in Finance Bill 2025.
Q.7 What change has been made in the computation of total income of the block period in section 158BB (1) of Income Tax Act,1961 in Finance Bill 2025?
Ans. The computation under section 158BB (1) of the Income Tax Act,1961 has been clarified to provide appropriate treatment for income based on books of account maintained in normal course. Reference to income declared by a taxpayer in the block return under section 158BC(1)(a) has been provided as ‘undisclosed income declared’.
Q.8 What change has been made in the computation of total income of the block period in section 158BB (3) of Income Tax Act,1961 in Finance Bill 2025?
Ans. The said section has been simplified to reiterate that income relating to international transaction or specified domestic transaction and pertaining to the part period of the previous year in which last of the authorisations of search is executed or requisition is made is kept out of the income of the block period.