Central Board of Direct Taxes (CBDT), Ministry of Finance (Department of Revenue), issued Notification No. G.S.R. 656(E) dated 24 July 2026, publishing the Income-tax (Third Amendment) Rules, 2026. The notification has been issued under section 533 read with section 294 of the Income-tax Act, 2025 (30 of 2025) to further amend the Income-tax Rules, 2026. The Rules are deemed to have come into force from 1 April 2026 and apply to searches initiated under section 247 or requisitions made under section 248 of the Income-tax Act, 2025 on or after that date.
The amendment modifies rule 332(1) of the Income-tax Rules, 2026 by substituting the reference to “Appendix 3” with “Appendix 3 and Appendix 4” and inserts Appendix 4, introducing ITR–B (ITR–Block) for filing the Income-tax Return for Block Assessment relating to search and requisition proceedings under Chapter XVI-B of the Income-tax Act, 2025 read with rule 180.
The newly inserted ITR–B seeks extensive information beginning with Part A – General Information, including:
- PAN, name, date of birth/incorporation, Aadhaar (where applicable), mobile number, email address and address.
- Nature of employment.
- Residential status.
- Whether the assessee is a domestic or foreign company.
- Date of initiation of search under section 247 or requisition under section 248.
- Date on which the last authorisation is deemed to have been executed under section 301(1)(d).
- Block period.
- Details of return filed in response to notices under section 294 or section 295, including notice particulars, DIN and filing due dates.
The form requires detailed information for the tax years comprising the block period. For each relevant year, it captures:
- Date of filing of the last return.
- Statutory provision under which the return was filed under either the Income-tax Act, 1961 or the Income-tax Act, 2025.
- Acknowledgement or receipt number.
- Whether any assessment, reassessment or recomputation was pending on the date of initiation of search or requisition, together with the applicable statutory provision.
For the current tax year (Y1/Y0, as applicable), the form also requires information regarding:
- Whether a return has been filed.
- Date of filing.
- Provision under which the return was furnished.
- ITR form used.
- Acknowledgement number.
- Total income declared.
- Total income after processing, where applicable.
- Value of international transactions.
- Value of specified domestic transactions.
- Whether the due date for filing has expired.
- Selection of the applicable ITR form where the due date has not expired.
- Income for partial tax years, where relevant.
The return contains schedules for reporting income relating to the relevant period, including:
- Salary.
- Income from house property.
- Profits and gains of business or profession, including speculative business, specified business and income taxable at special rates.
- Capital gains, distinguishing short-term and long-term capital gains, gains taxable at specified rates, DTAA-related gains, and capital gains taxable under section 194(1) of the Income-tax Act, 2025.
- Income from other sources, including income taxable at special rates and income from the activity of owning and maintaining race horses.
- Aggregate gross income.
The form also contains schedules for computation of undisclosed income for the block period and other block assessment particulars under the Income-tax Act, 2025, along with verification requirements and explanatory notes. The verification requires the declarant to affirm that the information furnished is true and complete and contains provisions relating to Tax Return Preparers where applicable.
The explanatory notes appended to the form define the tax years Y6 to Y1, Y0 and Y+1 for block assessment purposes, explain the treatment where search or requisition concludes in the same or a subsequent tax year, describe block periods applicable to another person, and provide guidance regarding furnishing provisional figures for certain tax years with reference to section 293(2)(c)(i) of the Income-tax Act, 2025.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 97/2026-Income Tax | Dated: 24th July, 2026
G.S.R. 656(E).—In exercise of the powers conferred by section 294 read with section 533 of the Income-tax Act, 2025 (30 of 2025), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 2026, namely:––
1. (1) These rules may be called the Income-tax (Third Amendment) Rules, 2026.
(2) They shall be deemed to have come into force on the 1st day of April, 2026.
2. Application.- These rules shall apply on any search initiated under section 247 or requisition made under section 248 of the Income-tax Act, 2025 on or after the 1st day of April, 2026.
3. In the Income-tax Rules, 2026,–
a. in rule 332, in sub-rule (1), for the word and figure “Appendix III”, the words and figures “Appendix III and Appendix IV” shall be substituted;
b. after Appendix III, the following shall be inserted, namely:–
Note 1: Tax Year Y6 to Y1:
Six tax years preceding the tax year in which search was initiated under section 247 or any requisition was made under section 248 of Income-tax Act, 2025 (30 of 2025).
Tax Year Y0:
♦ Where search/requisition is concluded in the same year in which it was initiated: Y0 is the period from the 1st April of the Tax Year in which search/requisition initiated up to the date of execution of the last of the authorisations for search or requisition.
♦ Where the date of execution of the last of the authorisations for search or requisition falls in a tax year subsequent to the year in which the search or requisition was initiated: Y0 is the complete tax year from the 1st April of the year in which search/requisition is initiated and up to 31st March of that year.
Tax Year Y+1 (To be filled in case the date of execution of the last of the authorisations for search or requisition falls in a tax year subsequent to the year in which the search or requisition was initiated): Y+1 is the period in the tax year from the 1st April of the year in which last of authorisations of search/requisition was executed and ending with the date of last of authorisations of search/requisition.
Note 2: Where the undisclosed income of the other person pertains only to the period commencing from the tax year (herein referred to as the specified year) immediately preceding the year of initiation of search or requisition; and ending on the date of initiation of search or making of requisition, then the block period in respect of such other person shall comprise of the specified year and the period starting from the 1st April of the tax year in which search was initiated or requisition was made and ending on the date of the execution of the last of the authorisations for such search or such requisition.
Note 3: Where the undisclosed income of the other person pertains to a single tax year out of the five tax years preceding the specified year, then the block period in respect of such other person shall comprise of only that single tax year.
Note 4: Refer section 293(2)(c)(i) of the Income-tax Act, 2025 (30 of 2025), for the purposes for filing details of the tax year Y1 where the relevant tax year has ended and the due date for furnishing the return under section 139(1) of the Income-tax Act, 1961 or section 263(1) of the Income-tax Act, 2025 for such year has not expired, where accounts are not audited (if they are required to be audited), provisional figures are required to be furnished based on the books of account maintained in normal course. This shall not be considered as a return under section 139(1) of the Income-tax Act, 1961 or section 263(1) of the Income-tax Act, 2025 for the relevant tax year. Further, this income is required to be included in the return of income furnished under section 139 of the Income-tax Act, 1961 or section 263 of the Income-tax Act, 2025 (30 of 2025) for the relevant tax year. (as applicable)
Note 5: Refer section 293(2)(c)(i) of the Income-tax Act, 2025 (30 of 2025), for the purposes for filing details of the tax year Y0 (where Y0 is a complete year) where the relevant tax year has ended and the due date for furnishing the return under section 263(1) of the Income-tax Act, 2025 (30 of 2025) for such year has not expired, provisional figures are required to be furnished based on the books of account maintained in normal course. This shall not be considered as a return under section 263(1) of the Income-tax Act, 2025 (30 of 2025) for the relevant tax year. Further, this income is required to be included in the return of income furnished under section 263 of the Income-tax Act, 2025 (30 of 2025) for the relevant tax year.
Note 6: Refer section 293(5) of the Income-tax Act, 2025 (30 of 2025), in terms of the provisions of this section, any undisclosed income in respect of any international transaction or specified domestic transaction pertaining to the part tax year comprising in the block period is required to be assessed under provisions other than the applicable provisions for block assessment. Accordingly, any undisclosed income on this account is not required to be submitted as part of the block return.
Note 7: Where any reference is made in this return to any tax year commencing on 1st April of 2025 or any earlier tax year, the same shall be construed as a reference to the corresponding previous year under the Income-tax Act, 1961 (43 of 1961).”.
[Notification No. 97/2026/F. No. 370142/11/2026-TPL]
PRADEEP SHARMA, Dy. Secy., Tax Policy and Legislation
Note: The Income-tax Rules, 2026 were published vide notification 198(E), dated the 20th March, 2026 and last amended vide notification GSR 646(E), dated the 21st July, 2026.
Explanatory Memorandum: It is certified that no person is being adversely affected by giving retrospective effect to this notification.
