Can NRI's Receive a Section 147 Notice?

Yes, NRIs can receive reassessment notices, provided that their India-sourced income, such as FD interest, rent, capital gains, etc., was underreported or undisclosed.

Can New Issues Be Raised During Reassessment?

Yes, under explanation 3 to Section 147, the AO can reassess any additional escaped income issues discovered during the process, regardless of whether they were not in the original notice.

NRI Income Tax & Compliance

Section 147 of the Income-tax Act, 1961 (ITA) Demystified

By Varun Gupta |Last Updated: January 6, 2026

Section 147 of the Income-tax Act, 1961 (ITA) Demystified

Section 147 of the Income Tax Act plays a vital role in ensuring that every income subject to taxation is accurately reported and assessed. It outlines the responsibilities of the Assessing Officer (AO) to identify discrepancies, issue notices, and conduct reassessments to preserve the integrity of the tax system.

The Finance Act of 2021 has significantly revamped the assessment and reassessment provisions under Section 147. In this blog, we will understand Section 147 in detail, but before that, let’s look at the important terms associated with it.

Varun Gupta(Tax Expert)

Mr Varun is a tax expert with over 13 years of experience in US taxation, accounting, bookkeeping, and payroll. Mr Gupta has not prepared and reviewed over 5000 individual and corporate tax returns for CPA firms and businesses.

Frequently Asked Questions

Section 147 allows the AO (Assessing Officer) to reassess or recalculate income that was missed or wrongly assessed in the previous year, where the taxpayer failed to report their taxable income accurately.

It means the AO must record concrete material facts and not assumptions, supporting his belief that income escaped assessment before reopening the case.

Normally, within four years from the end of the assessment year. However, for undisclosed income relating to foreign assets, the period extends up to 10 years.

After forming a belief under Section 147, the AO will issue a notice under Section 148 to the taxpayer, initiating the reassessment process.

Section 148A was introduced through the Finance Act 2021, which mandates a preliminary hearing before issuing a notice. It gives the taxpayers a chance to challenge the view of the Assessing Officer.

Section 147 of the Income-tax Act, 1961 (ITA) Demystified

Frequently Asked Questions

What is Section 147?

What Does "Reason to Believe" Mean?

How Long Can the AO Reopen an Assessment?

What is Section 148's Role in Reassessment?

What is Section 148a, and How Does It Protect Taxpayers?

Section 147 of the Income-tax Act, 1961 (ITA) Demystified

Frequently Asked Questions

What is Section 147?

What Does "Reason to Believe" Mean?

How Long Can the AO Reopen an Assessment?

What is Section 148's Role in Reassessment?

What is Section 148a, and How Does It Protect Taxpayers?