Income Tax Law / Search Assessments

Section 158B Income Tax Act: Block Period and Undisclosed Income Definitions

Section 158B defines the expressions used in Chapter XIV-B, the special procedure for assessment of undisclosed income found during a tax search or requisition. Its meaning changed substantially when the block assessment framework was reintroduced for searches initiated on or after 1 September 2024.

Current legal position (October 2026): The Income-tax Act, 2025 applies from 1 April 2026, subject to its transitional and saving provisions. The corresponding definitions for the new law appear in Section 301. Section 158B of the 1961 Act remains important when examining proceedings governed by the earlier enactment.
On this pageMeaning and scopeBlock periodUndisclosed incomeLast authorisationEarlier legal positionIncome-tax Act, 2025Official legal sources

What does Section 158B provide?

Section 158B is a definition provision for Chapter XIV-B. It does not itself impose a tax or prescribe the entire assessment procedure. It explains what constitutes a block period, what may be treated as undisclosed income, and when the last search or requisition authorisation is regarded as executed. Other provisions of the Chapter govern computation, notices, assessment and penalties.

Section 158B(a): Definition of block period

Under the framework reintroduced by the Finance (No. 2) Act, 2024, the block period generally comprises the six previous years relevant to the six assessment years preceding the previous year in which a search under Section 132 was initiated or requisition under Section 132A was made, together with the period from 1 April of the search/requisition year to the execution date of the last authorisation.

Example: If a search began during financial year 2025-26, the block period ordinarily covers the six preceding previous years, from 2019-20 through 2024-25, plus the portion of 2025-26 beginning 1 April 2025 and ending on the legally determined execution date. The actual dates must be checked against the search record and applicable law.

Section 158B(b): Definition of undisclosed income

The provision uses an inclusive definition. Undisclosed income can involve money, bullion, jewellery, virtual digital assets, other valuable articles, expenditure, or income revealed through entries in accounts, documents or transactions where the material represents income or property not disclosed, or which would not have been disclosed, for income-tax purposes. Incorrect claims of expenditure, exemption, deduction or allowance may also be covered when the statutory conditions are met.

Not every item discovered during a search automatically becomes undisclosed income. The connection with non-disclosure or an incorrect claim, the relevant block period and the statutory computation rules must be considered. See Section 158BB on computation.

Explanation: Execution of the last authorisation

For a search, the last authorisation is generally deemed executed when the search concludes as recorded in the last panchnama drawn for the person covered by the warrant. For a requisition under Section 132A, the relevant event is actual receipt of the books, documents or assets by the authorised officer. This date can affect the block-period end point and procedural calculations.

Historical version and legislative changes

The original Chapter XIV-B was introduced by the Finance Act, 1995, with effect from 1 July 1995. Under the earlier version reproduced on this website, the block period referred to six assessment years, while searches or requisitions before 1 June 2001 were subject to a ten-assessment-year formulation. The former definition of undisclosed income included unreported money, bullion, jewellery, valuables and entries, as well as false claims for expenses, deductions or allowances.

That historical wording must not be confused with the revised Chapter XIV-B introduced for searches and requisitions on or after 1 September 2024. The later framework also expressly addresses expenditure, exemptions and virtual digital assets through subsequent amendments.

Section 301 of the Income-tax Act, 2025

Section 301, titled Interpretation, provides the corresponding definitions in the 2025 Act's search-assessment provisions. It defines block period by reference to six preceding tax years and the relevant portion of the search year; defines search and requisition by reference to Sections 247 and 248; explains execution of the last authorisation; and defines undisclosed income, expressly including virtual digital assets and incorrect claims.

For proceedings spanning the transition between the two Acts, the applicable legislation and saving provisions should be checked before applying a section number or filing requirement.

Related procedural provisions

Under the 1961 Act, Section 158BA deals with assessment following search, Section 158BC sets out block-assessment procedure, and Section 158BD addresses undisclosed income relating to another person. The Income Tax Department also provides guidance on the ITR-B return for applicable block assessments.

Official legislation and guidance

Editorial note: This is a general explanation of the legislation, not a substitute for the statute or advice on individual proceedings. Updated 26 October 2026.