Summary: The process of income-tax assessment and reassessment is governed by statutory time limits for both the issuance of notices and the finalization of the assessment. For a Summary Assessment under Section 143(1), which is based on the return filed, there is no requirement to issue a notice, and the assessment must be completed within nine months from the end of the financial year in which the return was furnished. In the case of a detailed Scrutiny Assessment under Section 143(3), the notice must be served upon the taxpayer within three months from the end of the financial year in which the return was furnished. The completion of this assessment, along with a Best Judgment Assessment under Section 144, must occur within twelve months from the end of the Assessment Year (AY) in which the income was first assessable. Note that the time limit for both Scrutiny and Best Judgment Assessments was recently extended from nine months to twelve months by the Finance Act, 2023.
The time limits for Re-assessment under Section 147 are determined by when the income is deemed to have escaped assessment. Before proceeding with a re-assessment, the Income Tax Department must issue a notice under Section 148A (which initiates the verification process) within three years or, in certain specified cases, within five years from the end of the relevant AY. Subsequently, the formal notice under Section 148 (the final trigger for re-assessment) must be issued within a slightly longer period: three years and three months or five years and three months from the end of the relevant AY. Once the notice for re-assessment is served, the assessing authority has twelve months from the end of the financial year of service to complete the assessment. Furthermore, other procedural assessments have distinct timelines: a Fresh Assessment must be completed within twelve months from the end of the financial year in which the initiating order was received or passed.
Time limit for issuing different income-tax notices and completion of the assessment
| Section | Nature of Assessment | Time Limit | |
| To serve/ issue notice | For completion of the Assessment | ||
| Section 143(1) | Summary Assessment | – | Within 9 months from the end of the financial year in which the return is furnished |
| Section 143(3) | Scrutiny Assessment | Notice to be served within 3 months from the end of the financial year in which return is furnished | Within 12 months1 from the end of the Assessment Year in which income was first assessable* |
| Section 144 | Best Judgment Assessment | – | Within 12 months2 from the end of the Assessment Year in which income was first assessable* |
| Section 147 | Re-assessment | • Section 148 notice to be issued within 3 years and 3 months or within 5 years and 3 months from the end of the relevant assessment year in which income has escaped assessment
• Section 148A notice to be issued within 3 years or within 5 years from the end of the relevant assessment year in which income has escaped assessment |
Within 12 months from the end of the financial year in which notice for re-assessment was served |
| – | Fresh Assessment | – | Within 12 months from the end of the financial year in which the order was received or passed |
| – | Giving effect to appeal results | – | Within 3 months from the end of the month in which the order was received or passed |
| – | For giving effect to any finding or direction | – | Within 12 months from the end of the month in which such order is received or passed |
| – | For the assessment of partners if the assessment is made on the firm | – | Within 12 months from the end of the month in which assessment order is passed in case of the firm |
* For the purpose of completion of assessment in case of an updated return, the time limit of 12 months shall be counted from the end of the financial year in which the updated return is furnished3.
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1. The time limit has been increased from 9 months to 12 months bythe Finance Act, 2023 with effect 01-04-2023.
2. The time limit has been increased from 9 months to 12 months bythe Finance Act, 2023 with effect 01-04-2023.
3. Inserted by the Finance Act, 2022, w.e.f. Assessment Year 2022-23. Further, the time limit has been increased from 9 months to 12 months bythe Finance Act, 2023 with effect 01-04-2023
[As amended by Finance Act, 2025]
(Republished with amendments)
