ITR-B for Block Assessment: New Return Form Notified Under Income-tax Rules 2026

The Central Board of Direct Taxes, through Notification No. 97/2026 dated 24 July 2026, has brought in the Income-tax (Third Amendment) Rules, 2026, introducing a dedicated return form, Form ITR-B, for block assessment cases. This change, read with the amendment to Rule 332, creates a distinct compliance mechanism for search and requisition matters under the Income-tax Act, 2025.

With the search-related framework under the Income-tax Act, 2025 taking clearer shape, ITR-B is intended to serve as the exclusive return format for income that falls within the ambit of block assessment proceedings. Assessees and professionals will need to recalibrate their processes to separately address regular return filing and disclosure in block assessment situations.

Background: Third Amendment to Income-tax Rules 2026

The Income-tax (Third Amendment) Rules, 2026 constitute a procedural update focused primarily on:

  • formal recognition of Form ITR-B; and
  • amendment of Rule 332 to prescribe the manner and form of return filing in block assessment cases.

Prior to this amendment, the statute contemplated block assessments but did not prescribe a distinct, specific return form to capture income unearthed or dealt with during search and requisition proceedings under the Income-tax Act, 2025. The introduction of ITR-B attempts to fill that procedural gap by aligning the return format with the unique nature of such proceedings.

Note: The notification does not amend the substantive provisions relating to search, seizure or requisition. It primarily addresses how income is to be reported once those provisions are triggered.

Understanding Form ITR-B

Scope and Purpose of ITR-B

Form ITR-B has been notified as the official return form to be used only where block assessment provisions apply due to:

  • a search being initiated, or
  • a requisition being made

under the relevant search and requisition provisions of the Income-tax Act, 2025.

ITR-B is not meant to replace the regular ITR forms for normal assessment years.