Section 153 Income Tax Act: Assessment and Reassessment Time Limits

Section 153 of the Income-tax Act, 1961 prescribes the time within which the Income Tax Department must complete an assessment, reassessment or recomputation. The applicable deadline depends on the assessment year, the kind of proceeding, the date of notice or appellate order, and any statutory extension or excluded period.

Meaning and scope of Section 153

Assessment is the determination of taxable income and tax liability, commonly under the statutory assessment framework. Reassessment concerns income alleged to have escaped assessment under section 147. Recomputation refers to a fresh computation permitted by law. Section 153 regulates the time to complete these proceedings; the deadline for issuing a reassessment notice is separately governed by section 149.

Key completion deadlines under Section 153

The table states ordinary limits, not an unconditional final deadline in every case. Exclusions, extensions, transitional rules and specific amendments may change the calculation. See the Income Tax Department limitation-period guide and official assessment time-limit guide.

Historical assessment-year deadlines

Section 153(1) has changed repeatedly. For regular assessments under sections 143 and 144, the ordinary periods measured from the end of the assessment year were 21 months for AY 2017-18 and earlier under the substituted 2016 framework; 18 months for AY 2018-19; 12 months for AY 2019-20; 18 months for AY 2020-21; 9 months for AY 2021-22; and 12 months for AY 2022-23 onward. These are relevant when determining whether an older assessment was completed within time, subject to exclusions and other applicable legislation.

Important provisions explained

Section 153(1), (1A) and (1B): regular assessments and special returns

Sub-section (1) applies to assessment orders under sections 143 and 144. Sub-section (1A) separately addresses assessments where an updated return under section 139(8A) has been filed. Sub-section (1B) deals with a return furnished in consequence of an order under section 119(2)(b). The start date for computing limitation is therefore not identical in every case.

Section 153(2): reassessment

Reassessment under section 147 must ordinarily be completed within 12 months from the end of the financial year in which the section 148 notice was served, where the notice was served on or after 1 April 2019. For notices served before that date, the historical nine-month rule may be relevant. The legality and timeliness of the notice itself must be considered separately under sections 148, 148A and 149.

Section 153(3): fresh assessment after appeal or revision

Where an assessment is set aside or cancelled by the specified appellate or revisional authority, a fresh assessment generally must be made within the applicable statutory period, ordinarily 12 months from the end of the relevant financial year for orders received or passed on or after 1 April 2019. The precise date of receipt or passing of the order is important.

Section 153(4): transfer-pricing reference

Where a reference is made to the Transfer Pricing Officer under section 92CA(1) during relevant assessment or reassessment proceedings, the statutory completion period is extended by 12 months, subject to the applicable provisions and their conditions.

Section 153(5): giving effect to appellate orders

When the Assessing Officer must give effect to an order under sections 250, 254, 260, 262, 263 or 264 without making a fresh assessment or reassessment, the ordinary period is three months from the end of the relevant month. The law permits a further period in specified circumstances, and cases requiring verification or hearing may follow the fresh-assessment time limit.

Section 153(6): findings, directions and partners

Special time limits apply when an assessment gives effect to a finding or direction in specified appellate, revision or court orders, or where a partner's assessment follows reassessment of the firm. These provisions interact with section 150, which addresses notice issuance following findings or directions.

Sections 153(7), (8) and (9): transitional and revived proceedings

These provisions address older orders, assessments revived after abatement under search provisions, and the saving of the law applicable before the Finance Act, 2016. They remain relevant to disputes concerning proceedings commenced under earlier statutory regimes.

Explanation 1: exclusions from limitation

The limitation period is not always calculated by simple calendar addition. Subject to the version applicable to the proceeding, Explanation 1 provides for exclusion of specified periods, including:

• Time taken to reopen proceedings or provide a rehearing under section 129.
• Periods during which assessment proceedings are stayed by a court.
• Specified periods connected with withdrawal of approvals or registrations and related statutory references.
• Time allowed for a special audit under section 142(2A), including relevant litigation.
• Time between a valuation reference under section 142A and receipt of the valuation report.
• Specified periods concerning declarations under section 158A, settlement proceedings and advance rulings.
• Permitted periods for international exchange of information under sections 90 and 90A.
• Periods involving references concerning impermissible avoidance arrangements under section 144BA.
• Other specifically prescribed proceedings, including applicable search-related or exemption-related references.

Explanation 1 also contains safeguards governing the minimum remaining period in specified cases, including circumstances where fewer than 60 days remain after an exclusion. The exact wording and version of the Explanation applicable to the relevant assessment must be checked.

Explanation 2: income shifted between years or persons

Where an appellate or other qualifying order excludes income from one assessment year and attributes it to another, an assessment of that income for the other year may be treated as giving effect to a finding or direction. Similarly, where income is excluded from one person's assessment and attributed to another, the provision applies subject to the affected person having received the required opportunity of being heard. This rule is relevant to the operation of sections 150 and 153.

Income-tax Act, 2025 and the 2026 transition

The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026. The corresponding provision governing the time limit for completion of assessment, reassessment and recomputation is section 286 of the 2025 Act. A proceeding concerning an earlier assessment year may continue under saved provisions of the 1961 Act. Do not automatically apply a new tax-year rule to an earlier assessment-year dispute.

For the current legislation and updated statutory text, consult the Income Tax Department and the India Code official legislation portal.

Illustrative calculation

For an ordinary scrutiny assessment for AY 2024-25, the basic 12-month period measured from the end of the assessment year would ordinarily end on 31 March 2026. This illustration assumes no applicable exclusion, extension, special statutory rule or judicial intervention. A reassessment has a different starting point: the end of the financial year in which the section 148 notice was served.

Practical checks before claiming that an assessment is time-barred

1. Identify the relevant assessment year or tax year and the governing Act.
2. Determine whether the case concerns regular assessment, reassessment, updated return, appeal effect, fresh assessment or a search proceeding.
3. Verify the actual date of service of notice or receipt/passing of the appellate order.
4. Check transfer-pricing references, court stays, special audits and other statutory exclusions.
5. Apply any special transitional or saving provisions and the statutory wording in force for that proceeding.

Official legal references

• Income Tax Department: Section 153 statutory text (historical version)
• Income Tax Department: limitation periods
• Income Tax Department: notices and completion deadlines
• CBDT Circular No. 1/2024: explanatory notes
• India Code: central legislation

Editorial note: This article is a general explanation, not a substitute for reading the law applicable to the particular assessment year and proceeding. Updated 26 October 2026.