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Direct Tax Laws and International Taxation · Assessment Procedure including Dispute Resolution Process

Reassessment, Rectification and Time Limits for Assessment

Updated 11 October 2026 · Fact-checked

Reassessment reopens an assessment where income has escaped tax. Rectification (section 287) corrects a mistake apparent from the record within four years from the end of the financial year of the order. Section 286 fixes the time limit for completing assessments, generally one year from the end of the stated period, with extensions and exclusions.

Understand Reassessment, Rectification and Time Limits

An assessment cannot stay open forever. The Act therefore sets deadlines for the Assessing Officer (AO) to finish an assessment, reassessment or recomputation. These deadlines are in section 286. Each type of proceeding has its own starting point and its own period.

Most periods are one year. The clock starts from a stated date, for example the end of the financial year succeeding the relevant tax year (regular assessment), or the end of the financial year in which the notice under section 280 was served (reassessment, recomputation under section 279). Always read column C (starting point) before column D (period).

The time limit can move. A reference to the Transfer Pricing Officer extends the limit by twelve months (for Sl. Nos. 1 to 5 of the Table). Certain periods are excluded from the count, such as a court stay, a Valuation Officer reference, a special audit direction, or a Board for Advance Rulings application. If, after exclusions, less than sixty days remain, the remaining period is extended to sixty days.

Rectification is a different tool. It fixes a mistake apparent from the record. It is not a second appeal and cannot be used to reopen a matter already considered and decided in appeal or revision. Section 287 lets the authority amend its orders and intimations, either on its own motion or when the assessee, deductor or collector points out the mistake, in which case it must amend.

Safeguards matter. If the amendment raises tax or cuts a refund, the authority must first give notice and a reasonable opportunity of being heard. If it reduces liability, the AO must grant the refund due.

Key rules to remember

General assessment time limit (section 286(1), Sl. No. 1)
Limit = one year from the end of the financial year succeeding the relevant tax year
Applies to assessment orders under section 270(10) or 271.
Reassessment or recomputation under section 279 (Sl. No. 4)
Limit = one year from the end of the financial year in which notice under section 280 was served
Starting point is the service of the notice, not the tax year.
Orders giving effect to appellate or revisionary orders (Sl. No. 10)
Six months from the end of the month of receipt/passing; extendable to nine months with approval
Applies where no fresh assessment is made. Sl. No. 9 (verification or hearing needed) gives one year.
Transfer pricing extension (section 286(2))
Additional 12 months where a reference is made to the TPO under section 166(1)
Covers Sl. Nos. 1 to 5 of the Table only.
Minimum remaining period (section 286(4))
If remaining period after exclusions < 60 days, it is extended to 60 days
Applies after excluding periods listed in section 286(3).
Rectification time limit (section 287(8))
No amendment after four years from the end of the financial year in which the order or intimation was passed
Subject to section 288.
Order on rectification application (section 287(9))
Pass order within six months from the end of the month in which the application is received
Must still respect the four-year limit.

How to solve Reassessment, Rectification and Time Limits questions

For any question on time limits or rectification, work from the type of proceeding to the date, then adjust for extensions.

  1. 1Identify the proceeding: regular assessment, reassessment under section 279, fresh assessment after an appellate order, or an order giving effect to an order.
  2. 2Find the matching row of the section 286(1) Table and note the starting date and the period.
  3. 3Compute the starting date exactly. Financial year-end means 31 March; month-end means the last day of that month.
  4. 4Add the period, then apply extensions: twelve months for a TPO reference where applicable.
  5. 5Exclude any period under section 286(3), such as a court stay or Valuation Officer reference, and extend the deadline by that period.
  6. 6Check the sixty-day rule in section 286(4) if the remaining time is short.
  7. 7For rectification, confirm the mistake is apparent from the record, not a matter decided in appeal or revision, and within four years from the end of the financial year of the order.
  8. 8State the conclusion clearly: valid or barred, with the last date.

Quickest way: Row, Start Date, Adjust

When to use it: Use for date-based MCQs and short numerical questions on limitation.

  1. Pick the Table row from the nature of the order.
  2. Write the start date: 31 March for financial-year rows, month-end for month rows.
  3. Add one year (or six or two months as the row says).
  4. Add 12 months if TPO reference applies to rows 1 to 5.
  5. Add any excluded period, such as stay days, then check the 60-day floor.
  6. For rectification, add four years to 31 March of the year of the order.

Common mistakes in Reassessment, Rectification and Time Limits

  • Counting the time limit from the end of the tax year instead of the end of the financial year succeeding it.

    Students assume the clock starts when the tax year ends.

    Fix: For Sl. No. 1, the start is the end of the financial year succeeding the relevant tax year. Read column C every time.

  • Applying the twelve-month TPO extension to every row of the Table.

    Students remember the rule but not its scope.

    Fix: Section 286(2) extends only Sl. Nos. 1 to 5. Rows for orders giving effect to appellate orders are not extended this way.

  • Counting rectification four years from the date of the order.

    Confusion with other limits that run from the order date.

    Fix: Section 287(8) counts four years from the end of the financial year in which the order or intimation was passed.

  • Using rectification to reconsider a debatable issue or one decided in appeal.

    Students treat rectification as a cheap alternative to appeal.

    Fix: It covers only mistakes apparent from the record and excludes matters considered and decided in appeal or revision (section 287(2)).

  • Amending to increase tax without notice.

    Students focus on the AO's power and forget the safeguard.

    Fix: Section 287(4) requires notice of intention and a reasonable opportunity of being heard before any amendment that raises liability or reduces a refund.

  • Ignoring the sixty-day minimum after excluding periods.

    Students stop after subtracting the excluded days.

    Fix: If less than sixty days remain after exclusions, extend to sixty days under section 286(4).

Worked examples

Example 1

An assessment order for tax year 2026-27 falls under section 271 (Sl. No. 1 of the Table). No TPO reference was made and no period is excluded. By what date must the AO pass the order?

Show the solution
  1. Row: Sl. No. 1. Start: end of the financial year succeeding the tax year 2026-27.
  2. Tax year 2026-27 is the financial year 1 April 2026 to 31 March 2027. The succeeding financial year ends on 31 March 2028.
  3. Add one year: 31 March 2029.
  4. No TPO extension and no exclusion apply.

Answer: The AO must pass the order by 31 March 2029.

Example 2

Rectification: Mr Rajesh's assessment order was passed on 15 July 2026 (financial year 2026-27). He applies for rectification of an apparent arithmetical error on 10 February 2030. Can the order be rectified, and what is the position if he applied on 10 February 2031?

Show the solution
  1. The order was passed in the financial year 2026-27, which ends on 31 March 2027.
  2. Section 287(8): four years from the end of that financial year gives 31 March 2031.
  3. Application of 10 February 2030 is within the limit, so the authority must rectify the mistake, as the assessee has brought it to notice (section 287(3)(b)). It must pass its order within six months from the end of February 2030, that is by 31 August 2030.
  4. Application of 10 February 2031 is also before 31 March 2031, so the amendment is still permitted. The six-month period would run to 31 August 2031, but section 287(9) is subject to section 287(8), so the order must actually be passed by 31 March 2031.
  5. If the rectification increases tax, notice and a hearing opportunity are needed first.

Answer: Both applications are within time. The last date for any amendment is 31 March 2031. For the 2030 application the order is due by 31 August 2030, and for the 2031 application it is due by 31 March 2031.

Exam tips

  • Write the section 286 row number and its start date in your answer. Examiners award marks for the correct starting point.
  • In date questions, show the calculation line by line: start date, period, extensions, exclusions, final date.
  • For rectification, state three points: mistake apparent from the record, four-year limit from the end of the financial year, notice before any adverse amendment.
  • Remember rectification does not cover matters decided in appeal or revision.
  • In MCQs, watch for traps: month-end versus financial year-end, and Sl. Nos. 1 to 5 versus other rows for the TPO extension.

Practice questions from Assessment Procedure including Dispute Resolution Process

Reassessment, Rectification and Time Limits in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Reassessment, Rectification and Time Limits: frequently asked questions

What is the time limit for completing a regular assessment under the Income-tax Act, 2025?

Under section 286(1), Sl. No. 1, it is one year from the end of the financial year succeeding the relevant tax year. A TPO reference adds twelve months, and excluded periods extend it further.

How long do I have to rectify a mistake apparent from the record?

Section 287(8) bars amendment after four years from the end of the financial year in which the order or intimation was passed, except as provided in section 288. The authority must decide an application within six months from the end of the month of receipt, subject to that four-year limit.

Can rectification increase my tax?

Yes, but only after notice of the intention and a reasonable opportunity of being heard. A notice of demand is then issued.

Which periods are excluded when computing the time limit?

Section 286(3) excludes periods such as a court stay, a Valuation Officer reference, a special audit direction, a Board for Advance Rulings application, an exchange of information reference, and certain GAAR and other references. If under sixty days remain after exclusion, the time is extended to sixty days.