Compliance
India | How to Use the New ITR-BN Form & Search-Requisition Return Rules
CBDT has introduced ITR-BN and updated Rule 332/App. IV from 1 April 2026 — here’s how it affects taxpayers subject to search/requisition, and steps to comply.
By NomadicTax Research Team • 5-8 min read • August 27, 2026
## Background
In **July–August 2026**, the Indian CBDT issued **Notification No. 97/2026 [F. No. 370142/11/2026-TPL]**, introducing the **Income-tax (Third Amendment) Rules, 2026**. Key among these is the creation of **Form ITR-BN**, and amendments to Rule 332 via insertion of **Appendix IV**, governing returns related to *search and requisition* cases. These changes became effective 1 April 2026 (Assessment Year 2026-27). ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/latest-news?year=2026&utm_source=openai))
## What Changed: ITR-BN & Rule 332/App. IV
- **New Form ITR-BN**: Designed for taxpayers who under Sections 131 (search) or 132A (seizure), or Section 158BD/158BE (requisition) of the Income-tax Act, need to file under special rules. The form captures details of seized/requisitioned documents, assets, disclosures.
- **Rule 332 & Appendix IV**: Adds structure for *search or requisition* cases — specifying timelines, content required, how to compute income impacted by the search or requisition, penalties.
## Who Needs to File ITR-BN
- Individuals, HUFs, firms or any person subject to search/seizure or requisition by tax authorities under the relevant sections.
- Even if no income arises beyond what’s declared, the form must capture assets seized, requisitioned documents, etc.
## Practical Steps for Taxpayers
1. **Determine applicability**: review notices received under search or requisition sections to see if ITR-BN and App. IV apply.
2. **Collect documents**: seized/requisitioned goods or documents, valuation statements, income records, books of account, inventory, etc.
3. **Prepare schedule under App. IV**:
- Disclosures of seized assets or documents.
- Details of valuation and assessments as per search or requisition.
- Explanation of differences between declared income and declared under the search/requisition notice.
4. **File by due date**: The return for AY 2026-27 using ITR-BN must be submitted like other returns; ensure no delays to avoid default penalties.
5. **Observe penalties**: Non‐compliance (late filing, wrong/incomplete disclosure) may attract penalties under sections of the Income-tax Act, including misreporting or concealment.
## Example Case
Rahul, a business owner, receives a notice under Section 132A regarding a requisition of several stored financial records. He must file his AY 2026-27 return using **ITR-BN**, provide details in **Appendix IV** of assets/documents requisitioned, explain income differences observed, attach valuations. Even if his basic income remains unchanged, failure to comply correctly may expose him to penalties.
## Why It Matters & Planning Tips
- The new form and appendix **force greater transparency** over what assets/documents were found or seized and how income is reconstructed.
- Taxpayers with cross-border holdings or those using digital/ad‐hoc incomes (e.g. social media, software exports) must be extra careful since discrepancies uncovered in search cases can trigger ITR-BN obligations.
**Actionable tips**:
- Maintain detailed books and contemporaneous records even for foreign or digital incomes.
- If assets or documents are requisitioned, get valuation reports immediately.
- Engage a tax professional in case of search/requisition notices to avoid misstatements.
- Stay current with foreign asset reporting via the Annual Information Statement (AIS), which is now visible for many taxpayers. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/latest-news?year=2026&utm_source=openai))