Compliance
Navigating India’s New ITR-BN and Rule 332 — What Cross-Border Professionals Must Know
India has introduced Form ITR-BN and amended Rule 332 with Appendix IV in the Income-tax (Third Amendment) Rules, 2026. This article helps cross-border professionals and those subject to search/requisition cases understand the impact and best practices.
By NomadicTax Research Team • 5-8 min read • August 28, 2026
## What is ITR-BN and the Rule 332 changes?
- The Income-tax (Third Amendment) Rules, 2026 introduce **Form ITR-BN**, specifically designed for *search and requisition cases*, i.e. where the tax authorities have carried out searches or requisitions under Indian tax law. These changes come under **Rule 332**, involving insertion of **Appendix IV** to govern returns in such cases. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/latest-news?utm_source=openai))
- These amendments are **effective from 1 April 2026**, i.e. Assessment Year 2026-27 onwards. Filers in cases involving search/requisition activities must use ITR-BN. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/latest-news?utm_source=openai))
## Implications for Cross-Border Professionals & Diaspora
- If foreign income, foreign assets, or any overseas bank accounts are involved in a search or requisition, the new form and appendix impose stricter disclosure obligations.
- Non-resident Indians (NRIs) or Indian residents with foreign interests must ensure accuracy — mis-reporting can trigger penalties and delays.
- Since the Annual Information Statement (AIS) now includes **foreign asset and CRS/FATCA information**, mismatches may surface. Authorities may initiate search/requisition or issue notices based on data in AIS. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/latest-news?utm_source=openai))
## What actions should you take?
1. **Review past searches or requisitions**: If you received notice of a search/requisition, consult with a tax advisor and prepare to use ITR-BN when filing returns from AY 2026-27.
2. **Gather all documentation**: bank statements, foreign assets, correspondence related to searches, requisitions, or audits.
3. **Be transparent** in your AIS responses: make sure the assets and incomes are clearly covered in schedules; avoid surprises.
4. **Stay updated on DTAA claims**: some treaty benefits may be impacted if the income is subject to search or related orders.
5. **Seek advance rulings**: where complex treaty or transfer pricing issues arise, obtain clarity ahead of filing.
## Example
Suppose an Indian-resident consultant has foreign royalty income and is subject to a requisition under investigation. They would use **ITR-BN** to report income, disclose assets, mention the requisition details per Appendix IV, and reconcile AIS data. Using old forms may lead to non-compliance.
## Key takeaways
- ITR-BN and Appendix IV under Rule 332 are now mandatory for search/requisition cases from AY 2026-27.
- Cross-border professionals must ensure complete disclosure of foreign assets/income, aligning with AIS and DTAA benefits.
- Mistakes or omissions can lead to penalties or scrutiny — better to adopt robust record-keeping and seek professional advice early.
By proactively adjusting to India’s new rules under the Third Amendment, cross-border professionals protect themselves from non-compliance, while making full use of treaty protections where applicable.