Section 288 Income Tax Act 2025: When Can an Assessment Order Be Amended?
Section 288, titled Other amendments, allows the Assessing Officer to modify specified assessments and intimations when subsequent events alter the correct tax treatment. The provision prescribes qualifying circumstances and distinct starting points for limitation.
What does Section 288 permit?
Under Section 288(1), the Assessing Officer may take the actions listed in column B of its statutory table only where the corresponding conditions in column C are met. The four-year period referred to in Section 287(8) is calculated from the event specified in column D for each case. Section 287 applies, so far as may be, to these amendments.
This is a special statutory amendment mechanism, not an unrestricted power to review every assessment or revisit an issue merely because a different view is possible.
Which situations are covered by Section 288(1)?
1. Partner's remuneration
Amend a partner's assessment where remuneration is subsequently found non-deductible in the firm's assessment under Section 35(e). The four-year clock runs from the end of the financial year in which the subsequent order in the firm's case was passed.
2. Member's share in an AOP or BOI
Include or correct a member's share of income when later proceedings change the assessed income of an association of persons or body of individuals. Time runs from the end of the financial year of the subsequent order in the association's or body's case.
3. Recomputed carried-forward losses or depreciation
Where proceedings under Section 279 recompute losses or depreciation, the Assessing Officer may amend succeeding years affected by the carry-forward and set-off. Time runs from the end of the financial year in which the Section 279 order was passed.
4. Withdrawal of capital-gains relief on certain company transfers
Where an initially exempt transfer later triggers taxation because the asset is converted into stock-in-trade or the qualifying shareholding condition ceases within the statutory eight-year period, the transferor company's income may be recomputed. The triggering event determines the starting year.
5. Subsequent investment or deposit for capital-gains relief
Where capital gain was initially taxed but the assessee subsequently meets the qualifying acquisition, deposit or investment conditions within the extended period under Section 89, the assessment may be amended to exclude the eligible gain. Consult the precise column D trigger in the statutory table.
6. Later receipt of qualifying foreign-exchange income
A deduction under Section 144 that was denied for non-receipt or non-repatriation of qualifying convertible foreign exchange may be allowed after the income is received in or brought into India as legally required.
7. Foreign tax credit after settlement of a dispute
Where foreign tax credit was withheld because overseas tax was disputed, an amendment may allow credit following settlement. The assessee must submit evidence of settlement and payment and a no-duplicate-credit undertaking within six months from the end of the month of settlement.
8. Revised stamp-duty valuation
If a land or building capital gain was calculated using stamp-duty value and that value is subsequently revised in a qualifying appeal, revision or reference, the capital-gains computation may be amended.
9. Reduction of compensation
If compensation for compulsory acquisition or another specified transfer is subsequently reduced by a court, Tribunal or competent authority, the earlier capital-gains assessment may be amended to reflect the reduced consideration.
10. Revocation of patent or removal of patentee
A deduction for patent royalty under Section 152 may be withdrawn to the relevant extent if the patent is revoked or the assessee is removed as patentee by the competent authority under the Patents Act, 1970.
11. TDS deducted in a later tax year
Where income was included in an earlier return but tax was deducted and deposited in a subsequent tax year, an amendment may give the TDS credit in the year in which the income was offered or assessed. An application in the prescribed form must be made within two years from the end of the tax year in which TDS was deducted; the credit cannot also be claimed in another year.
What is the limitation period for Section 288 amendments?
For Section 288(1), the ordinary four-year period is not automatically counted from the original assessment order. The statute links the starting point to the later event listed in column D, such as a subsequent assessment order, settlement of foreign tax dispute, revised valuation or deduction of tax at source. The specific row must be checked before computing a deadline.
What does Section 288(2) provide for transfer pricing?
Section 288(2) separately addresses recomputation for two consecutive tax years following the year for which an arm's length price was determined. Where the Transfer Pricing Officer accepts a valid option under Section 166(9), the Assessing Officer must recompute the relevant years in conformity with the determined arm's length price and applicable directions under Section 275(5).
The subsection prescribes a three-month period from the end of the relevant month, linked to completion of the underlying assessment or, where the later year's assessment or intimation is not yet made, to that later order or intimation. These specific rules should not be confused with the four-year rule for the table in subsection (1).
Relevant statutory definitions and concepts
Practical illustrations
Example 1: Foreign tax credit
A resident taxpayer reports foreign income but foreign tax is under dispute, so the related credit is not allowed. After the foreign dispute is settled, the taxpayer submits the required payment evidence and undertaking within the statutory six-month filing window. Section 288(1), table item 7, may permit amendment to allow the eligible credit.
Example 2: TDS in a subsequent year
Income is offered to tax in one tax year, but the payer deducts and deposits TDS in the next. The taxpayer may seek amendment under table item 11, subject to the prescribed application and two-year deadline, to obtain credit in the year of the income without double credit.
Example 3: Reassessment changes a loss
A reassessment reduces a loss carried forward and set off in a subsequent year. The subsequent year's total income may require recomputation under table item 3.
Frequently asked questions
Is Section 288 the same as ordinary rectification?
No. Section 287 is the general rectification provision for mistakes apparent from the record; Section 288 identifies particular events and circumstances permitting further amendments, with specified limitation starting points.
Does every amendment have a four-year deadline from the original order?
No. Under subsection (1), the four years are reckoned from the event stated in column D of the applicable table row. Subsection (2) has separate transfer pricing deadlines.
Can TDS credit be moved to the year in which income was assessed?
In the circumstances prescribed in table item 11, yes, on a timely application, without granting the same credit in another tax year.
Can an Assessing Officer amend an assessment without giving a hearing?
The applicable requirements of Section 287 must be followed so far as may be, including notice and reasonable opportunity of hearing where the amendment adversely affects the taxpayer.
Official statutory resources
Income-tax Act, 2025 as amended by Finance Act, 2026 (official PDF)
Income Tax Department: Income-tax Act, 2025 resources
Official provision mapping: Section 155 (1961) to Section 288 (2025)
Last reviewed: 11 November 2026. This article is general legal information; the enacted text and subsequent amendments prevail.