Rules 332 and 333 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 332 lets the Director General of Income-tax (Systems) require that Forms, returns, statements, reports, orders and certificates in the Appendices be furnished electronically, and rule 333 requires companies and persons under audit to pay tax electronically. Since March 2026, rule 332(1) refers to "Appendix III and Appendix IV", because Notification 97/2026 inserted a new Appendix IV: Form ITR-BN, the income tax return for block assessment.
This article is written as per the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026. Later notifications should be checked before you act.
The Principal Director General or Director General of Income-tax (Systems), with the prior approval of the Board, may specify that any Form, return, statement, report, order or certificate in Appendix III and Appendix IV is furnished electronically under digital signature or, otherwise, through an electronic verification code (rule 332(1)). The Income-tax (Third Amendment) Rules, 2026 (G.S.R. 656(E), 24 July 2026), deemed in force from 1 April 2026, added the words "and Appendix IV" and inserted Appendix IV (Form ITR-BN) for search and seizure cases. Rule 333 requires a company, and any other person to whom section 63 applies, to pay tax, interest, fee and penalty electronically.
If a search or requisition has touched your business, our income tax return filing team can help with the return that follows.
What changed after March 2026
Notification 97/2026 is made under section 294 read with section 533 of the Income-tax Act, 2025. It is deemed to have come into force on the 1st day of April, 2026, and it applies to any search initiated under section 247 or requisition made under section 248 of the Act on or after the 1st day of April, 2026.
| Provision | As notified in March 2026 | After the amendment |
|---|---|---|
| Rule 332(1), the Appendices covered | "as specified in Appendix III" | "as specified in Appendix III and Appendix IV" |
| Appendix IV | Not part of the Rules | Inserted after Appendix III, headed "ITR-BN", "" |
The sections of the Act behind block assessment are explained in our article on sections 294 and 295, block assessment and undisclosed income of any other person.
Rule 332: electronic furnishing
Rule 332 is headed "Electronic furnishing of Forms, returns, statements, reports, orders, certificates, etc". The rule names no section of the Act in its heading. It has two sub-rules:
| Sub-rule | What it provides |
|---|---|
| (1) | The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, may, with the prior approval of the Board, specify that any of the Forms, returns, statements, reports, orders or certificates, by whatever name called, as specified in Appendix III and Appendix IV shall be furnished electronically (a) under digital signature, if it is required to be furnished under digital signature, or (b) through electronic verification code, in a case not covered under clause (a) |
| (2) | The same officer shall (a) with the approval of the Board specify the Forms, returns, statements, reports, orders and certificates to be furnished electronically; (b) lay down the data structure, standards and procedure for furnishing and verification, including modification in format if required to make it compatible for electronic furnishing; and (c) be responsible for ensuring secured capture and transmission of data, and for formulating and implementing appropriate security, archival and retrieval policies |
The rule leaves to the Director General the choice of which Forms go electronic and in what standards; what has been specified is not in the text consulted for this article.
If you want to confirm which of your filings fall under these specifications before a due date, our income tax return filing team can help.
Appendix IV: Form ITR-BN, in outline
Appendix IV is printed in the notification under the words "see rule 332(1)". It is headed "ITR-BN: Income tax return for block assessment ", and says it is to be read with section 294(1)(a) of the Income-tax Act, 2025 and rule 180 of the Income-tax Rules, 2026. Our post on rules 179 and 180, notice of demand and block assessment return covers the rule that refers to it.
The form is arranged in Parts A to H followed by a verification:
- Part A is general information, including the date of initiation of search under section 247 or requisition under section 248, the block period and details of returns filed earlier for the preceding tax years.
- Part B is the break-up of income as per section 293(2)(c)(ii) and (iii).
- Part C is the computation of undisclosed income, with a version for a search concluded in the same year as it was initiated and a version for one concluding in a later year.
- Part D is the head-wise break-up of the undisclosed income for the block period.
- Part E is tax payable, Part F the details of taxes paid on undisclosed income of the block period, and Parts G and H tax payments not included in Part F for which credit is sought.
- A Notes section explains the tax years Y6 to Y1, Y0 and Y+1 and the block period of another person in certain cases.
This article does not go through the fields of the form; read the notification for the printed layout.
Rule 333: electronic payment of tax
| Sub-rule | What it says |
|---|---|
| (1) | The following persons shall pay electronically the tax, interest, fee and penalty on or after the date of commencement of the rule: (a) a company, and (b) a person other than a company to whom the provisions of section 63 are applicable |
| (2)(a) | "Pay electronically" means payment by internet banking facility of the authorised bank, or by credit or debit cards |
| (2)(b) | The word "tax" has the meaning in section 2(106) |
Our article on section 63, tax audit explains who falls within the second group.
An example
Silverline Traders Private Limited is a company. Under rule 333(1)(a) it must pay its tax, interest, fee and penalty electronically, by internet banking of an authorised bank or by credit or debit card. Separately, if a search is initiated at the company's premises under section 247 after 1 April 2026, any block assessment return will be in Form ITR-BN, Appendix IV, which rule 332(1) now covers when the Director General of Income-tax (Systems) specifies electronic furnishing.
Need help with electronic compliance?
Whether it is a block assessment return after a search, or tax payments you must now make electronically, getting the mode right avoids avoidable defects. We can help through our books of accounts compliance service.
Key takeaways
- Rule 332(1) now covers Forms in Appendix III and Appendix IV.
- Appendix IV is Form ITR-BN, the income tax return for block assessment in search and seizure cases.
- G.S.R. 656(E) is deemed in force from 1 April 2026 and applies to searches and requisitions on or after that date.
- Rule 333 requires companies and persons under section 63 to pay electronically, by internet banking or card.
Read next
- Rules 179 and 180: notice of demand and block assessment return
- Sections 294 and 295: block assessment
- Section 247: search and seizure
- Section 63: tax audit
- Rules 133 and 134: electronic payment modes
Disclaimer: Based on the Income-tax Rules, 2026 (G.S.R. 198(E), notified on 20 March 2026), read with the amending notifications issued up to 22 September 2026, as consulted on 2 October 2026. It explains the words of the rules and forms only; later notifications, the forms and utilities on the e-filing portal, circulars and the way the tax authorities apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.