Section 288 · Assessment
Section 288 of the Income-tax Act, 2025 — Other Amendments (Post-Assessment Rectification)
By CA Rajat Agrawal
Updated 05 Jul 2026
Chapter XVI
📜 What the law says — Section 288, Income-tax Act 2025
288. (1) The Assessing Officer, may carry out such actions as are specified in
column B of the Table below for reasons mentioned therein, subject to the
conditions as specified in column C, within four years referred to in section 287(8)
which shall be reckoned from the time as specified in column D, and the provisions
of section 287 shall, so far as may be, apply to such amendment:—
TABLE
Sl. Actions Conditions Time
No.
A B C D
1. Amendment of Where any remuneration to any From the end of the
order of assess- partner determined in completed financial year in
ment of the part- assessment of the firm is sub- which the subsequent
ner of a firm so sequently found not deductible order was passed in
as to adjust the under section 35(e) in terms of— the case of the firm.
income of the part- (a) assessment or reassess-
ner corresponding ment of the firm; or
to the amount not (b) any reduction or enhance-
deductible under ment made in the income of
section 35(e). the firm under this section
or section 287 or 359 or 363
or 365 or 368 or 377 or 378;
or
(c) any order passed under
section 245D(4) of the
Income-tax Act, 1961
(43 of 1961) on the appli-
cation made by the firm.
2. Amendment of Where the share of the member From the end of the
order of assess- in the income of the association financial year in
ment of the mem- of persons or body of individuals which the subsequent
ber of an associ- determined in completed assess- order was passed in
ation of persons ment is subsequently found not the case of the asso-
or of a body of in- included in the assessment of ciation or body.
dividuals; so as to the member or, if included, is not
include the share correct in terms of—
of the member in (a) assessment or reassess-
the assessment or
In plain language
What Section 288 actually deals with
Important scope note: Section 288 of the Income-tax Act, 2025 is titled "Other amendments". Despite the "assessment-notices" tag, it is not about issuing notices and it is not about authorised representatives (that topic sits at Section 515 of the 2025 Act). Section 288 is the consolidated post-assessment rectification / re-computation provision. It is the direct successor to Section 155 of the Income-tax Act, 1961 (carried in as Clause 288 of the Income-tax Bill, 2025).
In plain terms: after your assessment is already complete, certain later events can make the original assessment wrong or incomplete. Section 288 gives the Assessing Officer (AO) the power to go back and amend that earlier order to reflect the later development — without you having to file a fresh appeal in most cases.
Who it applies to
- Partners of a firm whose income needs re-computation when the firm's assessment changes or firm remuneration is later found non-deductible.
- Members of an AOP/BOI whose share of income is omitted, wrongly included, or later re-determined.
- Any taxpayer with capital gains affected by later events — stamp-duty revaluation, court-reduced compensation, or exemption/reinvestment outcomes.
- Taxpayers claiming foreign tax credit (FTC) where a foreign tax dispute is settled after the Indian assessment.
- Taxpayers carrying forward losses/depreciation whose later-year income must be recomputed.
- Anyone whose TDS credit was claimed in the wrong year and needs to be allowed in the correct year.
The situations Section 288 covers
The provision lists specific triggers where the AO may amend the order. The main categories are:
- Firm and partner adjustments — correcting a partner's assessment after the firm's income or remuneration position changes.
- AOP/BOI member shares — including or correcting a member's share of income.
- Loss / unabsorbed depreciation carry-forward — recomputing a later year once an earlier-year figure is settled.
- Capital gains — stamp-duty valuation revisions, reduction of compensation by a court/tribunal, conversion of capital asset to stock-in-trade, and reinvestment-linked exemptions.
- Foreign tax credit — granting credit once an overseas tax dispute is finally settled.
- TDS credit — shifting credit to the correct assessment year.
- Transfer pricing — flowing an arm's-length price determination into consecutive years.
Key conditions and time limits
- General window: four years. Most amendments must be made within four years, but the clock does not start from the original assessment — it starts from an event-specific date (e.g., end of the financial year in which the subsequent order was passed; end of the month in which a foreign tax dispute is settled; end of the financial year in which TDS was deducted).
- Foreign tax credit: measured from the end of the month in which the dispute is settled — a shorter, month-based trigger.
- Transfer pricing: a tight three-month re-computation window applies once the arm's-length price is fixed.
- Rectification machinery borrowed: the section applies the procedure of the rectification provision (Section 287, the 2025 successor to Section 154), so an amendment that increases liability generally requires a notice and opportunity to be heard.
How it interacts with related sections
- Section 287 (rectification of mistakes): Section 288 imports Section 287's process. Think of 287 as fixing an obvious mistake on the face of the record, and 288 as amending an order because of a later external event.
- Assessment sections: the original order under the assessment provisions is what gets amended.
- Foreign tax credit and transfer pricing provisions: supply the substantive rules; Section 288 is the mechanism to feed the result back into a closed year.
Practical implications for taxpayers
- A closed assessment is not always final — later events can legitimately reopen a narrow slice of it, in your favour or against you.
- If a later order helps you (e.g., FTC becomes available, compensation is reduced, TDS belongs in another year), you can request the AO to amend rather than litigate afresh.
- Watch the event-based deadline: a favourable amendment can lapse if you do not act within four years of the triggering event.
- Where the amendment increases your tax, insist on the hearing and written order that Section 287's procedure guarantees.
💡 Example
Worked example 1 — Foreign tax credit after a dispute is settled. Ms. Anjali, a software consultant, is assessed for the year and pays Indian tax of ₹4,00,000 on foreign-source income. Her foreign tax of ₹90,000 was under dispute abroad, so the AO did not allow the credit. The overseas dispute is settled in June 2027, confirming ₹90,000 as payable. Under Section 288 she asks the AO to amend the earlier order and grant FTC of ₹90,000. Because the FTC trigger runs from the end of the month the dispute is settled, she must move within the prescribed window — the AO amends the order and her Indian liability drops from ₹4,00,000 to ₹3,10,000.
Worked example 2 — Capital gains after compensation is reduced by a court. Mr. Rao's land is compulsorily acquired and he is initially taxed on a capital gain based on compensation of ₹50,00,000 (say tax of ₹9,00,000). Two years later a court reduces the compensation to ₹40,00,000. The original ₹50,00,000 gain is now overstated. Under Section 288 the AO amends the assessment to recompute the gain on ₹40,00,000, and Mr. Rao's capital-gains tax falls accordingly — no fresh appeal needed, provided the four-year event-based limit is respected.
A relatable story. Ravi and his partner run a small design firm. In the firm's assessment the AO later disallows part of the partners' remuneration. That change means Ravi's own personal return — filed and assessed a year earlier — now shows too much "remuneration" income. Instead of Ravi re-opening the whole case, Section 288 lets the AO simply amend Ravi's earlier assessment to align his share, with the four-year clock starting from the end of the financial year in which the firm's order was passed. Ravi gets a clean corrected order and a refund of the extra tax he had paid.
| Trigger event | What the AO amends | Time limit starts from |
|---|
| Firm's order changes partner remuneration / income | Partner's personal assessment | End of FY in which the subsequent order was passed |
| AOP/BOI share re-determined | Member's share of income | End of FY in which the subsequent order was passed |
| Stamp-duty valuation revised | Capital gains computation | End of FY in which the revision is made |
| Court/tribunal reduces compensation | Capital gains on transfer/acquisition | End of FY in which compensation is reduced |
| Foreign tax dispute settled | Foreign tax credit allowed | End of the month in which dispute is settled |
| TDS credit claimed in wrong year | Year in which TDS credit is allowed | End of FY in which tax was deducted |
| Transfer pricing arm's-length price fixed | Consecutive-year re-computation | Three-month window after determination |
General outer limit for most items: four years from the event-specific start date shown above.
Related sections
Section 287 — Rectification of mistakes apparent from record (successor to s.154) Section 515 — Appearance by authorised representative (successor to old s.288) Section 280 — Issue of notice where income has escaped assessment Section 290 — Modification and revision of notice in certain cases Section 159 — Foreign tax credit relief Section 166 — Determination of arm's-length price (transfer pricing)
Forms under this section
Income-tax forms (2025) prescribed under Section 288:
Frequently asked questions
Is Section 288 of the 2025 Act about authorised representatives like the old Section 288?
No. The old Section 288 of the 1961 Act dealt with authorised representatives, but in the Income-tax Act, 2025 that topic has moved to Section 515. Section 288 of the 2025 Act is titled 'Other amendments' and deals with post-assessment rectification and re-computation.
Which old section does Section 288 of the 2025 Act correspond to?
It broadly corresponds to Section 155 of the Income-tax Act, 1961, consolidating the various situations where an assessment can be amended after later events. The Bill carried it as Clause 288.
What is the time limit to amend an order under Section 288?
The general limit is four years, but the clock starts from an event-specific date rather than the original assessment — for example the end of the financial year in which the triggering order was passed, or the end of the month a foreign tax dispute is settled.
Can Section 288 be used in my favour to get a refund?
Yes. If a later event reduces your income or allows a credit — such as reduced compensation, foreign tax credit after a dispute, or TDS moved to the correct year — you can ask the AO to amend the earlier order, subject to the time limit.
Will the AO give me a hearing before increasing my tax under Section 288?
Generally yes. Section 288 applies the rectification procedure of Section 287, so an amendment that enhances your liability requires notice and an opportunity to be heard.
Does Section 288 cover transfer pricing adjustments?
Yes. Where an arm's-length price is determined, Section 288 allows the result to flow into consecutive years, subject to a tight three-month re-computation window.
Do I need to file a fresh appeal to correct my assessment for a later event?
Usually not. Section 288 is designed to let the AO amend the existing order directly for the specified triggers, which avoids duplicative litigation — but you should raise it within the applicable time limit.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 05 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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