Income Tax Act 2025: Section 270 for Tax Year 2026-27

Assessment

[Section-270 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]

Section 270(1) of Income Tax Act 2025

270(1) Where a return has been made under section 263, or in response to a notice under section 268(1) such return shall be processed in the following manner:—

• 270(1)(a) the total income or loss shall be computed after making the adjustments towards the following:—
  • (i) any arithmetical error in the return;
  • (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return;
  • (iii) disallowance of loss claimed, if return of the tax year for which set off of loss is claimed was furnished beyond the due date specified under section 263(1);
  • (iv) disallowance of expenditure or increase in income indicated in the audit report but not taken into account in computing the total income in the return; or
  • (v) disallowance of deduction claimed under section 144 or under any of the provisions of Chapter VIII if the return is furnished beyond the due date specified under section 263(1);
• 270(1)(b) the tax, interest and fee, if any, shall be computed on the basis of the total income computed under clause (a);
• 270(1)(c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax, interest and fee, if any, computed under clause (b) by—
  • (i) any tax deducted at source;
  • (ii) any tax collected at source;
  • (iii) any advance tax paid;
  • (iv) any rebate or relief allowable under Chapter IX;
  • (v) any tax paid on self-assessment; and
  • (vi) any amount paid otherwise by way of tax, interest or fee;
• 270(1)(d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or refund due to, the assessee under clause (c); and
• 270(1)(e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee.

Section 270(2) of Income Tax Act 2025

270(2) Before making any adjustment under sub-section (1)(a),—

• (a) an intimation is to be given to the assessee of such adjustments either in writing or in electronic mode;
• (b) the response received from the assessee in this regard, if any, shall be considered; and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made.

Section 270(3) of Income Tax Act 2025

270(3) For the purposes of sub-section (1), an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax, interest or fee is payable by, or no refund is due to, him.

Section 270(4) of Income Tax Act 2025

270(4) No intimation under sub-section (1) shall be sent after the expiry of nine months from the end of the financial year in which the return is made.

Section 270(5) of Income Tax Act 2025

270(5) For the purposes of sub-sections (1) to (4),—

• 270(5)(a) “an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return,—
  • (i) of an item, which is inconsistent with another entry of the same or some other item in such return;
  • (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or
  • (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction;
• 270(5)(b) “the acknowledgement of the return” shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under sub-section(1)(c), and where no adjustment has been made under sub-section(1)(a).

Section 270(6) of Income Tax Act 2025

270(6) For the purposes of processing of returns under sub-section (1), the Board may make a scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under the said sub-section.

Section 270(7) of Income Tax Act 2025

270(7) The scheme made under sub-section (6) shall, as soon as may be laid before each House of Parliament.

Section 270(8) of Income Tax Act 2025

270(8) Where a return has been furnished under section 263 or in response to a notice under section 268(1), the Assessing Officer or the prescribed income-tax authority, if, considers it necessary or expedient to ensure that the assessee—

• 270(8)(a) has not understated the income;
• 270(8)(b) has not computed excessive loss;
• 270(8)(c) has not under-paid the tax in any manner,
• shall serve on the assessee a notice requiring him, on a date to be specified therein,—
  • (i) either to attend the office of the Assessing Officer; or
  • (ii) to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return.

Section 270(9) of Income Tax Act 2025

270(9) No notice under sub-section (8) shall be served on the assessee after the expiry of three months from the end of the financial year in which the return is furnished.

Section 270(10) of Income Tax Act 2025

270(10) On the day specified in the notice issued under sub-section (8), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer, subject to the provisions of sub-sections (11) and (13), shall—

• (a) by an order in writing, make an assessment of the total income or loss of the assessee; and
• (b) determine the sum payable by him or refund of any amount due to him on the basis of such assessment.

Section 270(11) of Income Tax Act 2025

270(11) In the case of entities referred to in sub-section (12), which are required to furnish the return of income under section 263(1)(a)(iv), no order under sub-section (10) making an assessment of the total income or loss of any such entity shall be made by the Assessing Officer, without giving effect to the provisions of section 11, unless—

• (i) the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions mentioned in Schedule III (Table: Sl. No. 23, 24 or 25), by such entity, where in his view such contravention has taken place; and
• (ii) the approval granted to such entity has been withdrawn or notification issued in respect of such entity has been rescinded.

Section 270(12) of Income Tax Act 2025

270(12) For the purposes of sub-section (11), the entities shall be—

• (a) a research association referred to in Schedule III (Table: Sl. No. 23);
• (b) an association or institution referred to in Schedule III (Table: Sl. No. 24);
• (c) an institution referred to in Schedule III (Table: Sl. No. 25).

Section 270(13) of Income Tax Act 2025

270(13) In the case of a registered non-profit organisation, where the Assessing Officer is satisfied that any such entity has committed any specified violation as mentioned in section 351(1), he shall—

• (a) send a reference to the Principal Commissioner or Commissioner to withdraw the approval or registration; and
• (b) no order making an assessment of the total income or loss of such registered non-profit organisation shall be made by him without giving effect to the order passed by the Principal Commissioner or Commissioner under section 351(2)(ii)(A) or (B).

Section 270(14) of Income Tax Act 2025

270(14) For the purposes of sub-section (10), where the Assessing Officer is satisfied that the activities of the university, college or other institution referred to in section 45(3)(a) (hereinafter referred to as “entity”) are not being carried out in accordance with all or any of the conditions subject to which such entity was approved, then––

• (a) he may, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned entity, recommend to the Central Government to withdraw the approval; and
• (b) that Government may by order, withdraw the approval and forward a copy of the order to the concerned entity and the Assessing Officer.

Section 270(15) of Income Tax Act 2025

270(15) Where a regular assessment under sub-section (10) or section 271 is made,—

• (a) any tax or interest paid by the assessee under sub-section (1) shall be considered to have been paid towards such regular assessment;
• (b) if no refund is due on regular assessment or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be considered to be tax payable by the assessee and the provisions of this Act shall apply accordingly.

FAQs on Section 270 of Income Tax Act 2025

What is the scope of Section 270 of the Income Tax Act, 2025?
Section 270 deals with the processing and assessment of returns furnished under section 263 or in response to a notice under section 268(1). It lays out how income is computed, tax determined, and intimation sent to the assessee.

What adjustments can be made while processing a return under Section 270(1)(a)?
Adjustments include rectifying arithmetical errors, removing incorrect claims apparent from the return, disallowing losses or deductions if filed late, and considering disclosures in the audit report not reflected in the return.

Can deductions under Chapter VIII be disallowed during processing?
Yes, if the return is filed beyond the due date under section 263(1), deductions under Chapter VIII can be disallowed under section 270(1)(a)(v).

How is the tax or refund determined under Section 270(1)?
After computing total income, tax, interest, and fees are calculated. Then, tax credits like TDS, advance tax, rebates, and self-assessment tax are adjusted to determine the net payable or refundable amount.

Is an intimation always required to be sent after processing the return?
Yes, as per section 270(1)(d), an intimation is sent showing the amount payable or refundable. Even when there’s no tax or refund but a loss is adjusted, an intimation is still sent as per section 270(3).

What if no sum is payable or refundable and no adjustment is made?
In such cases, as per section 270(5)(b), the acknowledgement of the return is deemed to be the intimation.

What is considered an “incorrect claim apparent from information in the return”?
It includes claims inconsistent with other entries, unsupported entries, or deductions exceeding statutory limits as defined in section 270(5)(a).

Is the assessee informed before any adjustments are made?
Yes, section 270(2) mandates that the assessee must be informed and given a chance to respond within 30 days before adjustments are made.

What is the deadline for sending intimation under Section 270(1)?
No intimation shall be sent after the expiry of nine months from the end of the financial year in which the return is filed, as per section 270(4).

Can a centralised scheme be implemented for return processing?
Yes, the Board may implement a centralised scheme under section 270(6), and such a scheme must be laid before Parliament under section 270(7).

Can the Assessing Officer still scrutinise the return after processing?
Yes, under section 270(8), the Assessing Officer may issue a notice within three months if underreporting of income, excessive loss, or tax shortfall is suspected.

What is the time limit for issuing scrutiny notice under Section 270(8)?
Such notice must be issued within three months from the end of the financial year in which the return is filed, as per section 270(9).

What happens after the assessee responds to the scrutiny notice?
The Assessing Officer may conduct a hearing, examine evidence, and pass a written assessment order under section 270(10).

Are there additional safeguards for certain entities during assessment?
Yes, under section 270(11), certain research associations and institutions listed in Schedule III cannot be assessed unless the Assessing Officer reports contravention and the entity’s approval is withdrawn.

Which entities are protected under Section 270(12)?
These include research associations (Sl. No. 23), associations or institutions (Sl. No. 24), and certain institutions (Sl. No. 25) as per Schedule III.

What happens if a registered non-profit violates conditions?
Section 270(13) requires the Assessing Officer to refer the case to the Commissioner under section 351 and wait for the withdrawal of approval before passing an assessment order.

Can approval of educational institutions be withdrawn during assessment?
Yes, under section 270(14), if conditions of approval are not met, the Assessing Officer can recommend withdrawal of approval to the Central Government after providing an opportunity to be heard.

What is the effect of regular assessment on taxes already paid or refunded?
According to section 270(15), taxes or interest paid earlier are treated as paid under the regular assessment. If refund granted earlier exceeds the final amount, it becomes tax payable.