Block Assessment Scheme – brief
The Block Assessment Scheme is a provision in the Indian Income Tax Act that allows the Income Tax Department to assess a taxpayer’s income for a block of consecutive years in a single assessment order. This scheme is typically invoked in cases where a search or survey has been conducted by the tax authorities, and there is reason to believe that the taxpayer has undisclosed income.
Key Features of Block Assessment:
- Block Period: The assessment covers a block of six previous years preceding the year in which the search or survey was conducted.
- Time Limit: The tax authorities have 12 months from the end of the month in which the search or survey was completed to finalize the block assessment.
- Scope: The assessment covers the total income of the taxpayer for the entire block period.
- Regular Assessments: Regular assessments for the years covered by the block assessment become inoperative.
The block assessment scheme has been reintroduced in the Finance Bill 2024, with certain modifications. It is advisable to consult with a tax professional for specific guidance on the implications of this scheme in your case.
Tax experts point out that the block assessment scheme, which was in effect for search and seizure cases from 1995 to 2001, has been reintroduced under the new budget proposals. It will be implemented starting Sept 1, 2024, and according to the scheme, block assessment for the relevant year of the search and the preceding six years will be carried out.
Source: Various news
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