Tax in case of block assessment of search cases
[Section-192 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 192(1) of Income Tax Act 2025
192(1) The total income of the block period, determined under section 294 shall be chargeable to tax at the rate of 60%.
Section 192(2) of Income Tax Act 2025
192(2) The tax chargeable under sub-section (1) shall be increased by a surcharge, if any, levied by any Central Act.
FAQs on Section 192 of Income Tax Act 2025
Q1. What is meant by ‘block assessment’ in the context of search cases?
A block assessment refers to the determination of total undisclosed income for a specific block period, which is generally a span of ten previous years plus the period up to the date of search or requisition, assessed under Section 294.
Q2. At what rate is tax levied on the total income of the block period?
As per Section 192(1), the total income of the block period determined under Section 294 is taxed at a flat rate of 60%.
Q3. Is any surcharge applicable over and above the 60% tax rate?
Yes. As per Section 192(2), the tax calculated at 60% shall be increased by a surcharge, if any, as specified under any relevant Central Act.
Q4. Are regular deductions or exemptions applicable while computing income under block assessment?
No, typically block assessments focus on undisclosed income and do not allow regular deductions or exemptions applicable to normal assessments.
Q5. Is the 60% rate inclusive of surcharge and cess?
No, the 60% is the base rate. Any surcharge under a Central Act is added separately. Cess may also be applicable as per the prevailing provisions.
Q6. Is this tax rate applicable to all types of taxpayers (individuals, companies, etc.)?
Yes, the 60% tax rate under Section 192(1) applies uniformly to all taxpayers assessed under block assessment provisions, regardless of their legal status.
Q7. From which date does Section 192 become effective?
Section 192 is effective from 1st April, 2026, as per the Income Tax Act, 2025.
Q8. Can a taxpayer appeal against a block assessment order?
Yes, the taxpayer can file an appeal against a block assessment order, as per the appeal provisions provided in the Act.
Q9. What is the purpose of such a high flat rate in search cases?
The 60% flat rate is a penal rate intended to deter tax evasion by taxing undisclosed income discovered during search operations at a substantially higher rate.
Q10. Does the block assessment replace normal assessments for those years?
Block assessment is conducted in addition to or alongside regular assessments, specifically to assess undisclosed income unearthed during search proceedings.
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