Section 292 Income Tax Act 2025: How Is Undisclosed Income Assessed After a Search?

Section 292 establishes the framework for assessing or reassessing undisclosed income of a block period following a search or requisition. It also regulates the abatement and revival of other assessment proceedings.

Current law: The Income-tax Act, 2025 came into force on 1 April 2026. Section 292 applies where a search is initiated or requisition is made on or after commencement of the Act. Read it together with Sections 192 and 293 to 301 and the applicable transition provisions.

When does Section 292 apply?

The provision applies to a person in whose case a search is initiated or a requisition is made on or after 1 April 2026. The Assessing Officer must assess or reassess the total undisclosed income of the block period under the special procedure for search cases. It does not mean that every item of regular disclosed income is automatically treated as undisclosed income.

Section 292 explained subsection by subsection

Section 292(1): Special block assessment

Notwithstanding the general provisions of the Act, a qualifying search or requisition triggers assessment or reassessment of total undisclosed income for the block period under this Part of Chapter XVI. The manner of computing that income is addressed principally in Section 293, and the procedure in Section 294.

Section 292(2)(a): Pending proceedings abate

Ordinary assessment, reassessment or recomputation proceedings relating to a tax year within the block period, if pending on the date the search is initiated or requisition is made, abate on that date. Abatement here means that the specified pending proceedings cease by operation of law, so that the special statutory mechanism can operate.

Section 292(2)(b): Proceedings initiated during the intervening period

Ordinary proceedings for a tax year in the block period, other than the tax year in which the last search authorisation is executed or requisition is made, also abate where notice is issued between the date of search initiation or requisition and the date of the block assessment order under Section 294(1)(c). Abatement occurs on the date that notice is issued.

Section 292(3): Transfer pricing references

Where a reference under Section 166(1) has been made or an order under Section 166(6) passed, the relevant reference or order abates along with the assessment, reassessment or recomputation proceedings described in subsection (2), as applicable.

Section 292(4): Subsequent search or requisition

If another search or requisition takes place while a block assessment is pending, the earlier block assessment must first be completed. The later search or requisition is assessed thereafter. Where the remaining period to complete the later assessment is less than three months, it is extended to three months from the end of the month in which the earlier assessment was completed.

Section 292(5): Revival after annulment

If a block assessment proceeding or order under Section 294(1)(c) is annulled in appeal or another legal proceeding, the ordinary proceedings and related references or orders that had abated under subsections (2) or (3) revive from the date the Principal Commissioner or Commissioner receives the annulment order. That revival ceases if the annulment order is subsequently set aside.

Section 292(6): Income other than undisclosed income

Income other than undisclosed income for the tax year in which the last search authorisation is executed or requisition is made is assessed separately under the ordinary provisions of the Act. This distinction helps prevent the special block procedure from replacing every aspect of normal assessment.

Section 292(7): Tax on undisclosed income

Total undisclosed income of the block period, as referred to in Section 293(7), is charged at the rate specified in Section 192, regardless of the particular tax year or years to which it relates. Verify the applicable rate and other consequences under Section 192 and related provisions before computing liability.

Relevant statutory definitions and expressions

Block period: The period identified for the special search assessment under the applicable provisions of this Part; the exact beginning and end must be determined by the statutory definition in Section 301 and the search dates.

Undisclosed income: A defined expression for this special regime. Its scope must be determined under Section 301 and the computation rules in Section 293; it is not synonymous with every addition made in an ordinary assessment.

Search or requisition: Statutory investigative actions which trigger the block-assessment mechanism, subject to the authorisation and procedural requirements of the Act.

Abatement: Statutory termination of specified pending or subsequently noticed ordinary assessment proceedings for tax years falling in the block period.

Revival: Restoration of the abated proceedings in the circumstances described in Section 292(5).

Important distinction: Section 292 identifies when the block assessment applies and what happens to parallel proceedings. Sections 293 and 294 govern computation and procedure; Section 296 addresses completion time limits; Section 192 prescribes the applicable tax rate.

Practical illustration

Assume a search is initiated on 15 July 2026 while an ordinary reassessment for a tax year falling within the statutory block period is pending. Subject to the precise statutory conditions, that pending reassessment abates on the search date under Section 292(2)(a). The Assessing Officer then proceeds under the block-assessment provisions for undisclosed income. The actual block period, amount and tax treatment require examination of the search records and Sections 192 and 293 to 301.

Frequently asked questions

Does every pending assessment automatically abate after a search?

No. Section 292(2) applies to specified ordinary proceedings for tax years falling within the block period and according to the dates and exclusions prescribed there.

Can an abated assessment be revived?

Yes. Section 292(5) provides for revival following annulment of a qualifying block assessment proceeding or order, with a further rule if that annulment is set aside.

Is regular disclosed income included in the block assessment?

The special assessment concerns undisclosed income as defined and computed under the statute. Section 292(6) expressly preserves separate assessment of income other than undisclosed income for the tax year specified there.

Which section determines the tax rate?

Section 292(7) directs the reader to Section 192 for the rate on total undisclosed income of the block period.

Does Section 292 apply to searches before 1 April 2026?

Its express trigger is a search initiated or requisition made on or after commencement of the 2025 Act. Earlier cases require consideration of the applicable law and transition or savings provisions.

Official statutory references

For authoritative wording and subsequent amendments, consult the Income-tax Act, 2025 as amended by Finance Act, 2026 and the Income Tax Department's Act and Rules resource page. The explanation here is educational and does not replace the enacted text.

Last reviewed: 11 November 2026.