Chapter XVI - Procedure for Assessment
Section 295
Section 295: undisclosed income of any other person
Section 295 covers the situation where, during a search of one person (the "specified person"), the Assessing Officer becomes satisfied that some of the undisclosed income, money, assets or documents actually belongs to or relates to someone else (the "other person"). It routes the case, and the seized material, to that other person's own Assessing Officer, and fixes how the block period applies to them.
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Need advice on Section 295?
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) Where the Assessing Officer is satisfied that any undisclosed income belongs to or pertains to or relates to any person (herein referred to as the other person), other than the person (herein referred to as the specified person) with respect to whom search was initiated under section 247 or requisition was made under section 248, then— (a) any money, bullion, jewellery, virtual digital asset or other valuable article or thing or any books of account or other documents seized or requisitioned or any other material or information relating to the aforesaid undisclosed income shall be handed over to the Assessing Officer having jurisdiction over such other person; and (b) Assessing Officer of the other person shall proceed under section 294 against such other person and the provisions of this part shall apply accordingly.
(2) For the purposes of this section,— (a) where there is one specified person relevant to such other person, the block period for such other person shall be the same as that for the specified person; (b) where there is more than one specified persons relevant to such other person, the block period for such other person shall be the same as that for the specified person in whose case the block period ends on a later date; (c) where the undisclosed income of the other person pertains only to the period— (i) commencing from the tax year (herein referred to as the specified year) immediately preceding the year of initiation of search or requisition; and (ii) ending on the date of initiation of search or making of requisition, then irrespective of the provisions of section 301(a), the block period in respect of such other person shall comprise of the specified year and the period starting from the 1st April of the tax year in which search was initiated or requisition was made and ending on the date of the execution of the last of the authorisations for such search or such requisition; (d) where the undisclosed income of the other person pertains to a single tax year out of the five tax years preceding the specified year, then irrespective of the provisions of section 301(a), the block period in respect of such other person shall comprise of only that single tax year.
(3) In case of such other person as referred to in sub-section (1), for the purposes or abatement under section 292(2) and (3), the reference to the date of initiation of the search under section 247 or making of requisition under section 248 shall be construed as reference to the date on which such money, bullion, jewellery, virtual digital asset or other valuable article or thing or any books of account or other documents seized or requisitioned or any other material or information relating to the aforesaid undisclosed income were received by the Assessing Officer having jurisdiction over such other person.
Introduction
Where seized or requisitioned material indicates undisclosed income of another person, section 295 provides the route for that other person’s block assessment.
The material must be handed to that person’s Assessing Officer, with the statutory timing and abatement rules applied to that separate case.
Key takeaways
Another person’s undisclosed income
Where search material concerns someone other than the searched person, the specified satisfaction and handover procedure moves it to that other person’s Assessing Officer.
Block period follows the facts
The period follows the relevant searched person’s block period, subject to the narrower periods in subsection (2)(c) and (d).
Abatement date is adjusted
For the other person, statutory references to the search or requisition date are read using the material-handover date.
Handing the case to the other person's Assessing Officer
Where the Assessing Officer is satisfied that undisclosed income belongs to, pertains to, or relates to an "other person" (not the "specified person" who was actually searched under section 247 or requisitioned under section 248), then:
- any money, bullion, jewellery, virtual digital asset or other valuable article or thing, or books of account or other documents seized or requisitioned, or any other material/information relating to the undisclosed income, must be handed over to the Assessing Officer having jurisdiction over the other person; and
- that Assessing Officer then proceeds against the other person under section 294, and the block-assessment provisions of this Part apply accordingly.
How the block period is fixed for the other person
Where there is one specified person relevant to the other person, the block period for the other person is the same as for that specified person.
Where there is more than one relevant specified person, the block period for the other person is the same as for whichever specified person's block period ends on the later date.
Where the other person's undisclosed income pertains only to the period from the tax year immediately preceding the year of search/requisition (the "specified year") up to the date of initiation of search or making of requisition, the block period for that other person comprises only the specified year plus the period from 1 April of the search year to the date of execution of the last authorisation for that search or requisition.
Where the other person's undisclosed income pertains to a single tax year out of the five tax years preceding the specified year, the block period for that other person comprises only that single tax year.
Reference date for abatement
For the purposes of abatement under section 292(2) and (3) in the case of the other person, the reference to the date of search/requisition is read instead as the date on which the seized money, assets, books, documents or other material/information relating to the undisclosed income were received by the Assessing Officer having jurisdiction over the other person.
Step-by-step flow for undisclosed income of another person under Section 295
- 1
Is the Assessing Officer satisfied that undisclosed income belongs to a person other than the searched person?
The searched person is called the specified person. The person to whom the income belongs is the other person.
- No: Section 295 does not apply.
- Yes: Go to the next step.
- 2
Hand over the material
Under Section 295(1)(a), seized or requisitioned money, bullion, jewellery, virtual digital assets, other valuables, books, documents and other material about that income go to the other person's Assessing Officer.
- 3
Fix the block period for the other person
Section 295(2): the same as the specified person's; if there are several, the one ending later. If the income relates only to the year before the search year and the search year up to the search, the block covers that year and the current-year period. If it relates to a single year out of the five years before that year, the block is only that year.
- 4
Fix the date used for abatement
Section 295(3): for Section 292(2) and (3), the search date is read as the date the other person's Assessing Officer receives the material.
- 5
Proceed under Section 294
Section 295(1)(b): the other person's Assessing Officer proceeds under Section 294, and the provisions of this Part apply.
Practical checklist
Do
- Identify the person to whom each item of seized material relates.
- Track transfer of material and the other person’s notice and block period.
Avoid
- Automatically assess another person’s income in the searched person’s block case.
Illustrative example
Worked example: cash found in a search belongs to a relative
Hypothetical facts (illustration only, not a real taxpayer): A search is initiated on Mr. Arora in tax year 2030-31. Papers found show that cash of ₹18 lakh belongs to his cousin Mr. Bedi and relates only to tax year 2026-27. Mr. Bedi's Assessing Officer receives the material on 15 January 2031. Amounts and dates are assumed.
Other person
The Assessing Officer is satisfied that the income belongs to Mr. Bedi, so Section 295 applies.
Single year
The specified year is 2029-30, the year before the search year. Tax year 2026-27 is one of the five tax years before it, so under Section 295(2)(d) Mr. Bedi's block period is only tax year 2026-27.
Abatement date
Under Section 295(3), any pending proceedings of Mr. Bedi for that year are tested for abatement as on 15 January 2031, not the date of the search on Mr. Arora.
Assessment
Mr. Bedi's Assessing Officer issues a Section 294 notice to him and proceeds under that section.
Outcome
- Mr. Bedi is assessed under Section 294 for a block period of only tax year 2026-27.
- 15 January 2031 is the date that matters for abatement in his case.
Glossary
- Specified person
- The person in respect of whom the search under section 247 was initiated or requisition under section 248 was made.
- Other person
- A different person to whom the undisclosed income belongs, pertains or relates.
- Specified year
- The tax year immediately preceding the year of initiation of search or requisition, as used in subsection (2)(c) and (d).
Frequently asked questions
What happens if a search of one person turns up income belonging to someone else?
Under Section 295(1), the seized assets, books, documents or information relating to that other person's undisclosed income are handed over to the Assessing Officer with jurisdiction over that other person, who then proceeds against them under section 294 using the block-assessment procedure.
How is the block period worked out for this "other person"?
It generally matches the block period of the specified person who was actually searched (or the later-ending block period, if more than one specified person is relevant) - though narrower block periods apply in the specific situations described in Section 295(2)(c) and (d).
For abatement purposes, what date counts as the "search date" for the other person?
Section 295(3) substitutes the date the seized assets, documents or information were actually received by the other person's Assessing Officer, in place of the original search or requisition date.
Need help applying this provision to your situation?
Get help if undisclosed income from someone else's search has been linked to youLast updated 10 October 2026