Section 288 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.
The second half of the section 288(1) Table lists six more situations in which the Assessing Officer may amend an order after a later event, and sub-section (2) deals with recomputing income for two years after a Transfer Pricing Officer's determination. This article covers rows 6 to 11 and sub-section (2), as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026. Rows 1 to 5 are in our sibling article on serial numbers one to five.
Under the Table, the Assessing Officer may act on the stated conditions within four years (the period in section 287(8)) counted from the time in column D, and section 287 applies so far as may be. Rows 6 to 11 cover foreign exchange deduction, foreign tax credit, stamp-duty value revised on appeal, reduced compensation, patent royalty and TDS credit. Under sub-section (2), income for two consecutive tax years is recomputed within three months where a Transfer Pricing Officer has declared an option valid.
The frame
Section 288(1) lets the Assessing Officer carry out the actions in column B for the reasons mentioned there, subject to column C, within four years referred to in section 287(8), reckoned from column D. Section 287 applies so far as may be; read our article on section 287 for notice, hearing, written order and refund. If a refund or demand follows, see section 289. If you have an order that may need such an amendment, our legal dispute resolution team can look at the conditions with you.
The Table: serial numbers 6 to 11
| Serial number | Action (column B) | Condition (column C) | Time (column D) |
|---|---|---|---|
| 6 | Amend the order of assessment to allow deduction in respect of such income, or part of it, as is so received in, or brought into, India | Where in the assessment for any year a deduction under section 144 has not been allowed on the ground that (a) the income has not been received in convertible foreign exchange in India; or (b) the income, having been received in convertible foreign exchange outside India or converted into it outside India, has not been brought into India by or on behalf of the assessee with the approval of the Reserve Bank of India or such other authority as is authorised under any law in force for regulating payments and dealings in foreign exchange; and subsequently the income or part of it has been or is received in, or brought into, India as required for the deduction | From the end of the financial year in which such income is so received in, or brought into, India |
| 7 | Amend the order of assessment, or any intimation or deemed intimation under section 270(1), to give credit for income-tax for the year in which the income is offered to tax or assessed to tax in India | Where in the assessment for any tax year, or in an intimation or deemed intimation under section 270(1), (a) credit for income-tax paid in any country outside India or a specified territory outside India referred to in Chapter IX-B has not been given on the ground that the payment of the tax was under dispute; and (b) the dispute is subsequently settled and the assessee, within six months from the end of the month in which it is settled, furnishes to the Assessing Officer (i) evidence of settlement of dispute and evidence of payment of the tax; and (ii) an undertaking that no credit for that amount has been or shall be claimed for any other tax year | From the end of the financial year in which such dispute is settled |
| 8 | Amend the order of assessment to compute the capital gain by taking the full value of consideration to be the value as revised in appeal, revision or reference | Where in the assessment for any year a capital gain on transfer of land or building or both is computed (a) by taking the full value of consideration to be the value adopted or assessed by any authority of a State Government for the payment of stamp duty as per section 78(1); and (b) subsequently such value is revised in any appeal, revision or reference referred to in section 78(2)(b) | From the end of the financial year in which the order revising the value was passed in appeal, revision or reference |
| 9 | Amend the order of assessment to compute the capital gain by taking the compensation or consideration as reduced by the court, Tribunal or other authority to be the full value of consideration | (a) Where in the assessment for any year a capital gain on a transfer referred to in clause (b) is computed (i) by taking the compensation or consideration as referred to in section 67(12)(a), or, as the case may be, the compensation or consideration enhanced or further enhanced as referred to in section 67(12)(b), to be the full value of consideration deemed received or accruing; and (ii) subsequently the compensation or consideration is reduced by any court, Tribunal or other authority. (b) The transfer and consideration in clause (a) shall be (i) a transfer by way of compulsory acquisition under any law; (ii) consideration that was determined or approved by the Central Government or the Reserve Bank of India | From the end of the financial year in which the order reducing the compensation was passed by the court, Tribunal or other authority |
| 10 | Recompute the total income to disallow the deduction allowed under section 152 | Where a deduction has been allowed in any tax year under section 152 in respect of any patent, and subsequently by an order of the Controller or the High Court under the Patents Act, 1970 (39 of 1970), (a) the patent was revoked; or (b) the name of the assessee was excluded from the patents register as patentee in respect of that patent; the deduction from income by way of royalty attributable to the period during which the patent had been revoked, or the name of the assessee excluded as patentee, shall be deemed to have been wrongly allowed | From the end of the financial year in which the order of the Controller under section 2(1)(b), or the High Court under section 2(1)(i), of the Patents Act, 1970 was passed |
| 11 | Amend the order of assessment or any intimation to allow credit of tax deducted at source in the tax year referred to in column C, and the credit of such tax not to be allowed in any other tax year | (a) Where any income has been included in the return of income furnished under section 263 for any tax year, and tax on such income has been deducted at source and paid to the credit of the Central Government as per Chapter XIX-B in a subsequent tax year; and (b) an application is made by the assessee in such form as may be prescribed within two years from the end of the tax year in which the tax was deducted at source | From the end of the financial year in which such tax has been deducted |
Printing note: in row 6 the copy consulted prints "allowed" and "such" run together at a line break; it is read as two words. The Act refers to the Patents Act, 1970 in row 10; check that law for the meaning of the terms used. The form for the application in row 11 is left to the rules.
Sub-section (2): transfer pricing recomputation
Sub-section (2)(a) applies where the arm's length price is determined for an international transaction or specified domestic transaction under section 166(6) for any tax year, and the Transfer Pricing Officer has declared that an option exercised by the assessee is valid under section 166(9) in respect of that transaction for the two consecutive tax years immediately following. The Assessing Officer shall then recompute the total income of the assessee for those two years, by amending the order of assessment or any intimation or deemed intimation under section 270(1), as the case may be:
- in conformity with the arm's length price determined by the Transfer Pricing Officer under section 166(12) for that transaction; and
- taking into account the directions issued under section 275(5), if any, for that tax year,
within three months from the end of the month in which the assessment is completed in the case of the assessee for that tax year. The provisions of sections 165(7) and (8) apply to it.
Sub-section (2)(b): if the order of assessment, intimation or deemed intimation for the two consecutive tax years is not made within those three months, the recomputation shall be made within three months from the end of the month in which that order or intimation is made. See our articles on section 275 for directions of the Dispute Resolution Panel and on section 161 for transfer pricing.
A worked example
All names, dates and amounts are assumed.
Row 7 (foreign tax credit). Credit for tax paid in a foreign country was refused to Vindhya Software Pvt Ltd because the payment was under dispute. The dispute is settled on 20 December 2028. Vindhya furnishes the evidence of settlement, evidence of payment and the undertaking within six months from the end of December 2028, that is, by 30 June 2029. The financial year in which the dispute was settled ends on 31 March 2029; the four years run to 31 March 2033. The order can be amended to give the credit for the year in which the income is offered to tax or assessed to tax in India.
Row 11 (TDS credit). Tax on an income that Vindhya included in its return for a tax year was deducted and paid to the Central Government in a later tax year, which ended on 31 March 2028. The application must be made within two years from the end of that tax year, that is, by 31 March 2030. The financial year of deduction ends on 31 March 2028, so the four years of column D run to 31 March 2032.
Sub-section (2). The Transfer Pricing Officer determines the arm's length price for a transaction for a tax year and declares Vindhya's option valid for the next two tax years. The assessment for the first tax year is completed on 12 November 2027. Three months from the end of that month (30 November 2027) run to 29 February 2028 (2028 being a leap year), by which date the Assessing Officer is to recompute the income of the two following years in line with the determined price.
Need help with an amendment under section 288?
These rows give the assessee a way to correct an order when a later event changes the picture: foreign credit, a revised value, a reduced compensation or a late TDS credit. Missing a six-month or two-year step in the condition can close the door. Our team can help you check the conditions, assemble the evidence and write the application. See our legal dispute resolution service.
Key takeaways
- Rows 6 to 11 let the Assessing Officer amend for foreign exchange, foreign tax credit, revised stamp-duty value, reduced compensation, patent royalty and TDS credit, within four years from column D.
- Row 7 needs evidence and an undertaking within six months from the end of the month in which the dispute is settled.
- Row 11 needs an application in the prescribed form within two years from the end of the tax year in which the tax was deducted.
- Sub-section (2) requires recomputation for the two following tax years within three months from the end of the month of assessment, and sub-section (2)(b) provides a fallback three months.
- Section 287 applies so far as may be, including notice and hearing where liability increases.
Read next
- Section 288, serial numbers one to five
- Section 287: rectification of mistake
- Sections 290 and 291: modification of notice and intimation of loss
- Section 289: notice of demand
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.