Chapter XVI - Procedure for Assessment
Section 286
Section 286: time limit for completion of assessment, reassessment and recomputation
Section 286 sets the completion deadlines for assessment, reassessment and recomputation. Its eleven-row table gives the relevant starting point and period for each proceeding. Qualifying transfer-pricing references extend specified deadlines; separate provisions govern excluded periods, minimum remaining time and draft assessment orders.
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This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) No order in respect of proceedings mentioned in column B of the Table below shall be made after expiry of the period specified in the corresponding entry in column D of the said Table and such period shall be calculated from the date as mentioned in column C thereof.
| Sl. No. | Nature of Proceedings or orders | Date from which time limit for completion is to be calculated | Time limit for completion |
|---|---|---|---|
| 1 | Assessment order under section 270(10) or section 271. | End of the financial year succeeding the relevant tax year for which assessment is made. | One year. |
| 2 | Assessment order under section 270(10) or 271, where an updated return of income is furnished under section 263(6). | End of the financial year in which such updated return was furnished. | One year. |
| 3 | Assessment order under section 270(10) or 271, where return is furnished in consequence of order under section 239(3)(b). | End of the financial year in which such return was furnished. | One year. |
| 4 | Assessment, reassessment or recomputation order under section 279. | End of the financial year in which notice under section 280 was served. | One year. |
| 5 | Fresh assessment order or fresh order under section 166 in pursuance to an order under section 359, or 363, or 377, or 378, setting aside or cancelling an assessment order or an order under section 166. | End of the financial year in which order under section 359 or 363 is received by, or order under section 377 or 378 is passed by, the jurisdictional Principal Commissioner or Commissioner. | One year. |
| 6 | Assessment or reassessment which stands revived, as per section 292. | End of the month in which such assessment or reassessment stands revived. | One year. |
| 7 | Assessment required to be made in the hands of partner, in consequence of an assessment made on the firm under section 279. | End of the month in which assessment order in the case of firm is passed. | One year. |
| 8 | Assessment, reassessment or recomputation required to be made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order— (i) under section 359 or 363 or 365(10), or 368, or 377 or 378; or (ii) of any Court in a proceeding otherwise than by way of appeal or reference under this Act. | End of the month in which such order is received, or passed, by the jurisdictional Principal Commissioner or Commissioner. | One year. |
| 9 | Order giving effect to an order under section 359 or 363 or 365(10) or 368 or 377 or 378, otherwise than by making a fresh assessment or reassessment or fresh order under section 166, where— (i) verification of any issue by way of submission of any document by the assessee or any other person is to be carried out; or (ii) an opportunity of being heard is to be given to the assessee. | End of the month in which order under section 359 or 363 or 365(10) or 368 is received, or order under section 377 or 378 is passed, by the jurisdictional Principal Commissioner or Commissioner. | One year. |
| 10 | Order giving effect to an order under section 359 or 363 or 365(10) or 368 or 377 or 378 otherwise than by making a fresh assessment or reassessment or fresh order under section 166. | End of the month in which order under section 359 or 363 or 365(10) or 368 is received by, or order under section 377 or 378 is passed by, the jurisdictional Principal Commissioner or Commissioner. | Six months, extendable to nine months with the approval of authorities as per section 2(62) and (64). |
| 11 | Modification of assessment, reassessment or recomputation to give effect to the order passed under section 166 read with section 377. | End of the month in which such order under section 166 is received by the Assessing Officer. | Two months. |
(2)(a) Time limit for completion of any assessment or reassessment as provided in sub-section (1) [Table: Sl. Nos. 1 to 5], in a case where reference is made to the Transfer Pricing Officer for determining the arm’s length price under section 166(1), shall be extended by an additional period of twelve months. (b) In terms of provisions of sub-section (1) [Table: Sl. Nos. 1 to 5] and this sub-section, the draft of the proposed order of assessment referred to in section 275 shall be made at any time up to the time limit of assessment, reassessment or recomputation referred to in the said Table and this sub-section.
(3) For the purposes of this section, in computing the time limit for completion, the following period shall be excluded,— (a) the time taken in reopening the whole or any part of the proceeding on request of the assessee or in giving an opportunity to the assessee to be re-heard under section 244; or (b) the period commencing on the date on which stay on assessment proceeding was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by jurisdictional Principal Commissioner or Commissioner; or (c) the period commencing from the date on which the Assessing Officer intimates the Central Government or the prescribed authority, the contravention of the provisions of Schedule III (Table: Sl. Nos. 23, 24, 25) or section 270(11)(i), and ending with the date on which the copy of the order withdrawing the approval or rescinding the notification, as the case may be, under those provisions is received by the Assessing Officer; or (d) the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited or inventory valued under section 268(5) and— (i) ending with the last date on which the assessee is required to furnish a report of such audit or inventory valuation under that section; or (ii) where such direction is challenged before a court, ending with the date on which the order setting aside such direction is received by the Principal Commissioner or Commissioner; or (e) the period commencing from the date on which the Assessing Officer makes a reference to the Valuation Officer under section 269(1) and ending with the date on which the report of the Valuation Officer is received by him; or (f) the period (not exceeding sixty days) commencing from the date on which the Assessing Officer received the declaration under section 375(1) and ending with the date on which the order under section 375(3) is made by him; or (g) the period commencing from the date on which an application is made before the Board for Advance Rulings under section 383(1) and ending with the date on which the order either rejecting the application or the advance ruling pronounced by it, is received by the jurisdictional Principal Commissioner or Commissioner under section 384(5) or (8), as the case may be; or (h) the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 159 and ending with the date on which the information requested is last received by the jurisdictional Principal Commissioner or Commissioner, or one year, whichever is less; or (i) the period commencing from the date on which a reference for declaration of an arrangement to be an impermissible avoidance arrangement is received by the jurisdictional Principal Commissioner or Commissioner under section 274(1) and ending on the date on which a direction under sub-section (3) or (6) or an order under sub-section (5) of the said section is received by the Assessing Officer; or (j) the period commencing from the date on which the Assessing Officer makes a reference to the jurisdictional Principal Commissioner or Commissioner under section 270(13) and ending with the date on which copy of the order under section 351(2)(ii)(A) or (B), is received by the Assessing Officer.
(4) Where immediately after exclusion of the period as mentioned in sub-section (3), the remaining period for completion available to the Assessing Officer, as specified in sub-section (1), for making an order of assessment, reassessment or recomputation, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid time limits for completion shall be deemed to have been extended accordingly.
(5) Where the period available to the Transfer Pricing Officer is extended to sixty days as per section 166(8) and the remaining period for completion available to the Assessing Officer under this section, for making an order of assessment, reassessment or recomputation, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid time limit for completion shall be deemed to have been extended accordingly.
(6) Where a proceeding before the Interim Board for Settlement abates under section 245HA of the Income-tax Act, 1961 (43 of 1961) and the remaining period of limitation available to the Assessing Officer under this section for making an order of assessment, reassessment or recomputation, after the exclusion of the period under section 245HA(4) of the Income-tax Act, 1961 (43 of 1961), is less than one year, such remaining period shall be deemed to have been extended to one year; and for the purposes of determining the period of limitation under sections 282, 287, 288 and 296 and for the purposes of payment of interest under section 437, this sub-section shall also apply accordingly.
(7) In a case where the remaining time period for making an order of regular assessment or reassessment, after excluding the time period specified in sub-section (3)(j), ends before the end of the month, the remaining period shall be extended to the end of such month, and the specified time limit for completion shall be deemed to have been extended accordingly.
(8) For the purposes of this section and section 283, where by an order referred to in entry in sub-section (1) (Table: Sl. No. 8.A)— (i) any income is excluded from the total income of the assessee for a tax year, then, an assessment of such income for another tax year shall be deemed as one made in consequence of or to give effect to any finding or direction contained in the said order; or (ii) any income is excluded from the total income of one person and held to be the income of another person, then, an assessment of such income on such other person shall be deemed as one made in consequence of or to give effect to any finding or direction contained in the said order, if such other person was given an opportunity of being heard before the said order was passed.
Introduction
Section 286 sets the time limits for completing assessments, reassessments and recomputations, with specific extensions and excluded periods.
The last permissible date depends on the proceeding type and events such as transfer-pricing references.
Key takeaways
Completion dates vary
Assessment, reassessment and recomputation orders have different statutory completion periods under this section.
Transfer-pricing references can extend time
The section adjusts the completion deadline where a qualifying reference is made to the Transfer Pricing Officer.
Excluded periods and minimum balance
Specified periods are excluded when counting time, with a minimum remaining period for the Assessing Officer.
Standard time limits by type of proceeding
No order for the proceedings listed below can be made after the period specified has expired, calculated from the date shown:
| Proceeding / order | Time limit starts from | Time limit |
|---|---|---|
| Assessment order under section 270(10) or 271 | End of the financial year succeeding the relevant tax year | One year |
| Assessment order where an updated return is furnished under section 263(6) | End of the financial year in which the updated return was furnished | One year |
| Assessment order where return is furnished following an order under section 239(3)(b) | End of the financial year in which such return was furnished | One year |
| Assessment, reassessment or recomputation under section 279 | End of the financial year in which the section 280 notice was served | One year |
| Fresh assessment order (or fresh order under section 166) following an order setting aside/cancelling an assessment | End of the financial year in which the order is received/passed by the jurisdictional Principal Commissioner or Commissioner | One year |
| Assessment/reassessment revived under section 292 | End of the month in which it stands revived | One year |
| Assessment on a partner following the firm's assessment under section 279 | End of the month in which the firm's assessment order is passed | One year |
| Assessment/reassessment/recomputation to give effect to a finding/direction in an appellate, revisional or court order | End of the month in which the order is received/passed by the jurisdictional Principal Commissioner or Commissioner | One year |
| Order giving effect to an appellate/revisional order otherwise than by a fresh assessment, requiring verification or a hearing | End of the month in which the order is received/passed | One year |
| Order giving effect to an appellate/revisional order otherwise than by a fresh assessment (other cases) | End of the month in which the order is received/passed | Six months, extendable to nine months with approval |
| Modification of assessment under section 166 read with section 377 | End of the month in which the order under section 166 is received | Two months |
Extension where a transfer pricing reference is made
Where a reference is made to the Transfer Pricing Officer under section 166(1) to determine the arm's length price, the time limit for completing the assessment/reassessment (for the proceeding types listed as Sl. Nos. 1 to 5 in the Table) is extended by an additional twelve months.
Under subsection (2)(b), the proposed draft assessment order referred to in section 275 may be made up to the assessment, reassessment or recomputation time limit under Table rows 1–5 and subsection (2). This is distinct from the subsequent final-order timing under section 275.
Periods excluded from the time limit
In computing the time limit, the following periods are excluded from the count:
- Time taken in reopening a proceeding, or giving the assessee a fresh hearing, under section 244.
- Any period during which the assessment proceeding is stayed by a court order/injunction, until the certified copy of the order vacating the stay is received.
- The period between the Assessing Officer intimating a Schedule III contravention (or a section 270(11)(i) matter) and the order withdrawing approval or rescinding the notification being received.
- The period between the Assessing Officer directing an audit or inventory valuation under section 268(5) and the report being due (or, if challenged in court, the order on that challenge being received).
- The period between a reference to the Valuation Officer under section 269(1) and receipt of the Valuation Officer's report.
- Up to sixty days for a declaration process under section 375(1) and (3).
- The period an application is pending before the Board for Advance Rulings under section 383(1)/384.
- The period spent on an exchange-of-information reference under section 159 (capped at one year).
- The period between a reference to the jurisdictional Principal Commissioner or Commissioner under section 270(13) and receipt of the order under section 351(2)(ii)(A) or (B).
- The period a reference for an impermissible-avoidance-arrangement declaration is pending under section 274.
Minimum sixty-day buffer
If, after excluding the periods above, the remaining time available to the Assessing Officer is less than sixty days, it is extended to sixty days, and the overall time limit is deemed extended accordingly.
The same sixty-day buffer applies where the Transfer Pricing Officer's period is itself extended to sixty days under section 166(8) and the Assessing Officer's remaining time would otherwise be less than sixty days.
Settlement abatement, month-end extension and findings
Subsection (6) applies where a proceeding before the Interim Board for Settlement abates under section 245HA of the 1961 Act. After the statutory exclusion, a remaining assessment period of less than one year is extended to one year. The subsection also applies for the stated limitation and interest provisions.
The month-end extension in subsection (7) is specifically tied to the exclusion under subsection (3)(j), concerning the section 270(13) reference. It is not a general month-end extension for every exclusion.
Subsection (8) explains when assessment in another tax year, or in another person’s hands, is treated as giving effect to a finding or direction. For the other-person case, that person must have received an opportunity of being heard before the relevant order was passed.
Step-by-step flow for finding the completion deadline under Section 286
- 1
Which kind of order is being made?
Match it to the right row of the Table in Section 286(1). For example, Sl. No. 1 is a regular assessment under Section 270(10) or 271, and Sl. No. 4 is an order under Section 279.
- 2
Find the start date and period in that row
Column C gives the starting point (for example, the end of the financial year after the relevant tax year for Sl. No. 1). Column D gives the period (one year for most rows, six months extendable to nine months for Sl. No. 10, two months for Sl. No. 11).
- 3
Is there a reference to the Transfer Pricing Officer under Section 166(1)?
For Sl. Nos. 1 to 5, Section 286(2)(a) adds twelve months.
- Yes: Add twelve months, then go to the next step.
- No: Go to the next step.
- 4
Are any periods excluded under Section 286(3)?
Examples: a court stay, a special audit or inventory valuation under Section 268(5), a reference to the Valuation Officer, an advance ruling application, an exchange-of-information reference (capped at one year), or a GAAR reference under Section 274(1). Leave these periods out of the count.
- 5
Is less than sixty days left after the exclusion?
Under Section 286(4), the remaining period is extended to sixty days. Section 286(5) does the same where the Transfer Pricing Officer's time is extended under Section 166(8). Section 286(7) extends to the end of the month in a case under Section 286(3)(j). Section 286(6) deals with abatement before the Interim Board for Settlement.
Practical checklist
Do
- Build a chronology of notice, reference, stay and other dates relevant to the assessment deadline.
- Apply only the statutory exclusions or extensions supported by the record.
Avoid
- Use one universal completion deadline for every assessment type.
Illustrative example
Worked example: a regular assessment with a Valuation Officer reference
Hypothetical facts (illustration only, not a real taxpayer): A company's assessment for tax year 2026-27 is under Section 271. There is no transfer pricing reference. On 1 March 2029 the Assessing Officer refers a property to the Valuation Officer under Section 269(1). The report is received on 30 April 2029. Dates are assumed.
Normal deadline
Sl. No. 1: one year from the end of the financial year after tax year 2026-27. That financial year ends on 31 March 2028, so the deadline is 31 March 2029.
Excluded period
Under Section 286(3)(e), the period from 1 March 2029 to 30 April 2029 is excluded.
Time left
When the reference was made, the days from 1 March to 31 March 2029 (31 days) were still left. That is less than sixty days.
Sixty-day extension
Under Section 286(4), the remaining period is extended to sixty days. Counting 1 May 2029 as the first day, sixty days run to 29 June 2029 (31 days in May and 29 in June).
Outcome
- On these assumed dates, the assessment must be completed by about 29 June 2029.
- The exact day count should be checked against the dates in the record. A transfer pricing reference would first add twelve months under Section 286(2)(a).
Frequently asked questions
How long does the Assessing Officer have to complete a regular assessment?
Generally one year from the end of the financial year succeeding the relevant tax year for an assessment order under section 270(10) or 271, as set out in the Section 286 table - though several exclusions can extend the effective deadline.
Does a transfer pricing reference extend the assessment deadline?
Yes, for the assessment or reassessment proceedings in Table rows 1–5, a reference under section 166(1) adds twelve months under subsection (2)(a). Do not apply this extension automatically to every row of the table.
What happens if very little time is left after excluding stay periods, audits, etc.?
Section 286(4) guarantees a minimum: if the remaining time after exclusions is less than sixty days, it is extended to sixty days.
Need help applying this provision to your situation?
Check whether your assessment order is within the time limitLast updated 10 October 2026