Undisclosed income of any other person
[Section-295 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Where the Assessing Officer is satisfied that any undisclosed income belongs to or pertains to or relates to any person, other than the person with respect to whom search was initiated or requisition was made, then––
- (a) any money, bullion, jewellery, virtual digital asset or other valuable article or thing, or assets, or books of account, other documents, or any information contained therein, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person; and
- (b) such other person referred to in clause (a) shall be assessed under section 294 and the provisions of this Chapter shall apply accordingly.
FAQs on Section 295 of Income Tax Act
What does Section 295 of the Income Tax Act, 2025 deal with?
Section 295 deals with the treatment of undisclosed income that is found to belong to a person other than the one in respect of whom the search or requisition was originally initiated.
What is the procedure if undisclosed income belongs to another person?
If the Assessing Officer is satisfied that the undisclosed income pertains to another person, the seized or requisitioned items or information are handed over to the Assessing Officer who has jurisdiction over that other person.
What types of assets or documents can be handed over under Section 295?
Money, bullion, jewellery, virtual digital assets, other valuable articles or things, assets, books of account, documents, or any information contained therein can be handed over.
Who is responsible for assessing the income of the other person?
The Assessing Officer having jurisdiction over such other person will assess their income under Section 294.
Is Section 295 applicable only after a search or requisition?
Yes, it applies in situations where a search under section 132 or a requisition under section 133 is conducted, and undisclosed income is found to belong to someone else.
From when is Section 295 effective?
Section 295 is effective from 1st April, 2026.
What happens after the undisclosed income is handed over to the jurisdictional Assessing Officer?
The jurisdictional Assessing Officer will proceed to assess the other person under Section 294, and the provisions of Chapter XXVII will apply accordingly.
Is a satisfaction note by the Assessing Officer necessary under this section?
Yes, the Assessing Officer must be satisfied that the income belongs to another person for the provisions of this section to apply.
Can the original Assessing Officer continue with assessment of the other person?
No, the seized items and information must be handed over to the Assessing Officer who has jurisdiction over that other person, who will then take over the assessment.
Does Section 295 apply to virtual digital assets also?
Yes, virtual digital assets are explicitly mentioned and are covered under this section.
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