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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Repair Windows errors before they cause bigger problemsFix Now →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →India’s reassessment process lets the Income Tax Department revisit a return when it has information suggesting that taxable income escaped assessment. The procedure and deadlines now depend first on whether the relevant period is governed by the Income-tax Act, 1961 or the Income-tax Act, 2025.
First identify which income-tax law applies
The transition date is 1 April 2026. The Income Tax Department’s official transition FAQ states that sections 279–286 of the Income-tax Act, 2025 apply to Tax Year 2026–27 and later. Tax years beginning before 1 April 2026 remain under the Income-tax Act, 1961. The FAQ is available at the Department’s Reassessment Proceedings FAQs.
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| Period or situation | Governing framework | Main reassessment provisions |
|---|---|---|
| Tax Year 2026–27 and later | Income-tax Act, 2025 | Sections 279–286 |
| Tax years beginning before 1 April 2026 | Income-tax Act, 1961 | Sections 147–153, including sections 148, 148A and 149 |
| Proceedings already pending when the 2025 Act commenced | Generally continue under the 1961 Act | The old Act’s conditions and limitation rules continue to matter |
| Fresh proceedings for an earlier assessment year after 1 April 2026 | May still be initiated under the 1961 Act | Only if the old Act’s conditions and time limits are satisfied |
The Department’s FAQs on Interplay and Transition also explain that a section 148A(1) notice issued before commencement can lead to later steps under the 1961 Act. A return filed in response to an old-Act section 148 notice remains governed by that framework even when the return is filed after 1 April 2026.
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Reassessment is a statutory process for assessing or reassessing income that the Assessing Officer believes escaped assessment. It is different from a routine scrutiny assessment: the officer must first follow the statutory trigger, notice and approval requirements applicable to the relevant year. The process does not automatically mean that tax is payable; it gives the Department a route to examine the alleged escaped income and make an order.
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Under the 1961 Act, section 147 permits assessment or reassessment of escaped income and, subject to the statutory rules, other income that comes to the officer’s notice during the proceedings. The exact scope depends on the notice, the material relied on and the facts of the case.
How a reassessment proceeds under the 1961 Act
The sequence below describes the ordinary route. The statute contains exceptions, and an inquiry is not required in every case.
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Information indicates possible escaped income
The Assessing Officer receives information suggesting that taxable income was not assessed. Where the law requires an inquiry before notice, the officer may conduct it with prior approval of the specified authority. The existence, source and relevance of the information are important because they form the foundation for the later decision.
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Section 148A show-cause notice
Before issuing a section 148 notice, the officer generally gives the taxpayer an opportunity to respond through a section 148A show-cause notice. The notice should identify the information relied on and state the response period. The normal period is at least seven days and no more than 30 days, unless an extension is granted. Statutory exceptions can remove or alter this preliminary stage. The Department’s official section 148 text sets out the sequence and the relationship between sections 148A and 148.
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Decision under section 148A(3)
The officer considers the available record, including the taxpayer’s reply, and decides by order whether the case is fit for issuing a section 148 notice. Approval from the specified authority is required for this order. A taxpayer should read the order alongside the show-cause notice to see which objections were accepted or rejected and what material the officer treated as sufficient.
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Section 148 notice requiring a return
If the officer proceeds, a section 148 notice is issued with a copy of the section 148A(3) order. It requires the taxpayer to furnish a return for the relevant assessment year. The deadline is the period written in the notice and cannot exceed three months from the end of the month in which the section 148 notice is issued. A taxpayer who needs more time can request an extension, but should not assume that filing an extension request suspends the stated deadline.
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Assessment or reassessment under section 147
After the return and subsequent proceedings, the officer assesses or reassesses the escaped income. Other income that comes to notice during the proceedings may also be considered, subject to the Act’s conditions. The final order, demand and any consequential interest or penalty questions depend on the evidence and the statutory provisions applicable to that year.
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What to do when a section 148A notice arrives
Use the response window to test both the facts and the procedure. A practical response file should contain:
- The exact notice and service details: record the date shown on the notice, the date it was served, the assessment year and the response deadline.
- The information relied on: download every attachment and annexure. Check whether the material actually relates to you, the correct year and the type of income alleged to have escaped assessment.
- Your original tax record: assemble the filed return, computation, tax audit report if applicable, financial statements, schedules, transaction statements and earlier correspondence.
- A point-by-point reply: explain factual errors, duplicate items, already-disclosed income, source-of-funds evidence and any legal objection that can be supported by documents.
- Proof of submission: retain the acknowledgement, uploaded documents and any confirmation generated by the e-filing portal.
Do not ignore the notice because no tax demand has yet been raised. If documents are missing or the deadline is impractical, make a written extension request promptly and continue preparing the substantive response. Whether a notice or order is defective, invalid or time-barred requires case-specific analysis; the date, assessment year, statutory exception and service record can change the result.
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How long can the Department start reassessment?
For years governed by the 1961 Act, section 149 sets the principal limitation periods. The periods below are measured from the end of the relevant assessment year and reflect the Department’s current table, amended by Finance Act, 2026. They are not universal for every historical year or factual situation; exclusions, extensions and special rules must be checked.
| Amount of escaped income considered | Latest period for section 148A show-cause notice | Latest period for section 148 notice |
|---|---|---|
| Below ₹50 lakh | Within 3 years | Within 3 years and 3 months |
| ₹50 lakh or more | Within 5 years | Within 5 years and 3 months |
Read the current wording of section 149 with the Department’s reassessment overview. The ₹50 lakh test is a statutory threshold for the longer period, not a general estimate of tax demand.
Illustrative date calculation
Suppose an assessment year ended on 31 March 2024. On the simplified section 149 periods above, a case below ₹50 lakh would ordinarily require the section 148A notice by 31 March 2027 and the section 148 notice by 30 June 2027. If the escaped income is ₹50 lakh or more, the corresponding dates would ordinarily be 31 March 2029 and 30 June 2029. This illustration does not account for statutory exclusions, extensions or special transitional rules.
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How long does a reassessment take to finish?
The Department’s current notice-time-limit table says reassessment under the 1961 Act is generally completed within 12 months from the end of the financial year in which the reassessment notice was served. The table identifies its provisions as amended by Finance Act, 2026. See the official time-limit page and check the assessment year, the version of the law in force, exclusions and any extension before relying on a date.
For proceedings under the 2025 Act, section 286 provides a one-year period for an assessment, reassessment or recomputation order under section 279. The year is counted from the end of the financial year in which the section 280 notice was served. The statute contains extensions and exclusions for specified situations. The current text is available at section 286 of the Income-tax Act, 2025.
What changes under the Income-tax Act, 2025?
For Tax Year 2026–27 and subsequent tax years, reassessment is organized under sections 279–286 rather than sections 147–153 of the 1961 Act. The section numbers change, but the practical questions remain familiar: what information triggered the action, what notice was served, how much time was allowed to respond, which approval was required and when the order must be completed.
Do not transfer a deadline from an old-Act notice to a new-Act case merely because the wording appears similar. Identify the tax year, read the section cited on the notice and apply the completion and limitation rules in that enactment. For a new-Act case, section 286’s one-year completion rule is distinct from the old Act’s current 12-month table.
Transition scenarios after 1 April 2026
| Scenario | What generally follows | What to verify |
|---|---|---|
| Pending old-Act reassessment at commencement | Proceeding continues under the 1961 Act | Original notice, assessment year, approvals and any revised statutory deadline |
| Fresh action for an earlier year such as AY 2022–23 or AY 2024–25 | May be initiated under the 1961 Act if its conditions and limitation rules are met | Section 149 period, escaped-income threshold and applicable exclusions |
| Section 148A(1) notice issued before commencement | Later steps can continue under the 1961 Act | Whether the notice was timely and whether the statutory sequence was followed |
| Return filed after 1 April 2026 in response to an old-Act section 148 notice | Return remains part of the old-Act proceeding | The notice’s cited law and the response deadline |
| Tax Year 2026–27 or later | 2025 Act sections 279–286 apply | Section 280 notice and section 286 completion calculation |
The official transition FAQ puts the central rule plainly: “The reassessment provisions of the Income Tax Act, 2025 (Sections 279 -286) will apply to Tax Year 2026 -27 and subsequent tax years.”
Common mistakes that create avoidable risk
- Confusing the two notices: a section 148A show-cause notice is an opportunity to respond before the section 148 notice; it is not itself the final reassessment notice requiring the return.
- Counting from the wrong date: section 149 periods run from the end of the relevant assessment year, while completion periods use the financial year in which the notice was served.
- Using the wrong law: a notice issued after 1 April 2026 can still concern an earlier year under the 1961 Act.
- Missing the evidence package: the information relied on and its annexures should be checked for identity, year, amount and prior disclosure.
- Assuming every case has the same steps: statutory exceptions and approval requirements can alter the ordinary sequence.
- Ignoring service records: keep portal logs, email alerts, downloaded notices and acknowledgement numbers because timing disputes often turn on proof of service.
A practical checklist before you respond
- Write down the assessment year or tax year and the Act cited.
- Record issue and service dates for every notice.
- Calculate the stated response deadline and place it on a calendar.
- Download the notice, order, annexures and information relied upon.
- Reconcile the alleged escaped income with your return, books and third-party statements.
- Prepare indexed documents and a point-by-point explanation.
- Submit through the prescribed channel and save the acknowledgement.
- Ask a tax professional or lawyer to review limitation, approval and jurisdiction issues when the amount or facts are material.
When specialist advice is worthwhile
Professional review is particularly useful where the notice concerns the ₹50 lakh threshold, multiple years, complex transactions, a change in the person assessed, disputed service, or a possible limitation issue. A professional can distinguish a factual explanation from a legal objection and ensure that the response preserves documents and procedural points without assuming that a deadline or notice is invalid.
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