Income Tax Survey: Powers and Limits of the Department under Income Tax Act 2025 (Section 253)

An income tax survey is a visit by a tax officer to a business, professional or charitable premises to inspect books, check stock and ask questions. It is governed by section 253 of the Income-tax Act, 2025. The officer can inspect records, verify stock, record a statement on oath and, with recorded reasons, impound books for up to 15 days (exclusive of holidays), and longer only with prior approval. The officer cannot remove any asset or stock.

This guide explains who can conduct a survey, where and when, what you must provide, what the officer may do, and what the officer may not do. It is written for business owners and for CAs who advise them. Every point below comes from section 253 of the Act, as amended by the Finance Act, 2026, unless another provision is named.

What is an income tax survey under section 253?

Section 253(1) lets an income-tax authority enter a place where a business, a profession or an activity for a charitable purpose is carried on. The entry can be at the principal place or at any other place of that business. The power applies "irrespective of anything contained in any other provision of this Act".

A survey is different from a search. A search is authorised under section 247, which starts from the authority having reason to believe certain things about income or assets. A survey under section 253 is a visit to a place of business or charitable activity to inspect and verify. The two are separate powers with separate conditions, and this article covers only the survey.

Who can conduct a survey?

Section 253(11)(A) defines "income-tax authority" for this section:

• A Principal Commissioner or Commissioner, a Principal Director or Director, a Joint Commissioner or Joint Director, an Assistant Director or Deputy Director, an Assessing Officer, or a Tax Recovery Officer; and
• An Inspector of Income-tax, but only for sub-sections (1)(i), (5)(a) and (8). That is: asking for technical assistance and access to records, marking and copying documents, and the post-event expenditure enquiry.

All of them must be subordinate to the Principal Director General, Director General, Principal Chief Commissioner or Chief Commissioner, as specified by the Board. An Inspector therefore cannot, on that basis alone, record a statement on oath or impound books under sub-section (5).

Which places can be surveyed?

An authority may enter a place of business, profession or charitable activity if the place:

1. is within the area assigned to that authority (section 253(1)(a)); or
2. is occupied by a person over whom that authority has jurisdiction (clause (b)); or
3. is a place for which the authority is authorised by the income-tax authority who holds the area or jurisdiction (clause (c)).

Section 253(2) widens this. A place counts as a business place for the survey even if no business runs there, when the person carrying on the business states that any of the following are kept there: books of account or other documents, cash, stock, other valuable articles, or a computer system relating to the business or charitable activity.

When can the officer enter? Timing rules

Section 253(3) fixes the hours:

Type of place	When entry is allowed	Provision
Place of business, profession or charitable activity, including a place covered by sub-section (2) (for example a godown where you say books or stock are kept)	Only during the hours the place is open for business, profession or the charitable activity	253(3)
Any other place (a place outside sub-sections (1) and (2))	Only after sunrise and before sunset	253(3)
Verification of TDS or TCS compliance	Only after sunrise and before sunset	253(4)

What can the officer ask you to do?

After entering, the authority may require the proprietor, trustee, employee or any other person attending to, or helping in, the business at that time and place to do three things (section 253(1)):

• Provide technical and other assistance, including access codes, so that books of account, other documents, or information in electronic form or on a computer system available at the place can be inspected.
• Provide facilities to check and verify any asset or stock found there.
• Furnish information useful or relevant to any proceeding under the Act.

"Proceeding" is wide. Section 253(11)(B) covers a proceeding in respect of any year that is pending on the date of the survey, or was completed on or before that date, and also proceedings that may begin after that date.

What powers does the officer have during a survey?

Section 253(5) lists what the authority may do:

Power	Detail	Provision
Mark and copy	Place identification marks on books and documents inspected, and make or cause to be made extracts or copies, including from a computer system	253(5)(a)
Record a statement	Record the statement of any person on oath that is useful or relevant to any proceeding	253(5)(b)
Impound	Impound books, documents or a computer system inspected, after recording reasons	253(5)(c)
Inventory	Make an inventory of any asset or stock checked or verified	253(5)(d)

How long can books or a computer be impounded?

Under section 253(5)(c), impounded material can be retained:

• up to fifteen days (exclusive of holidays); or
• for more than fifteen days (exclusive of holidays) only with the prior approval of the approving authority.

The reasons must be recorded when the material is impounded. The Act does not set a longer outer limit in this section, so the extension depends on that approval.

What can the officer not do?

Section 253(7) is direct: the authority shall, on no account, remove or cause to be removed any asset or stock from the place it entered. The authority may check the stock and prepare an inventory, but the goods stay where they are.

Other limits in section 253:

• Prior approval. Under section 253(10), the action is taken with the prior approval of the Principal Director General, Director General, Principal Chief Commissioner or Chief Commissioner.
• Entry hours. As set out above, business hours for business places and sunrise-to-sunset for other places.
• Recorded reasons for impounding. Section 253(5)(c) requires them.
• TDS or TCS verification survey is narrower. Under section 253(6), an authority acting under sub-section (4) can only mark and copy documents (5)(a) and record statements on oath (5)(b). It cannot impound books or make an inventory of stock under that sub-section.

What if someone refuses to cooperate?

Section 253(9) deals with refusal or evasion. If a person refuses or evades providing facility to inspect books, documents or a computer system, to check cash, stock or other valuables, to furnish information, or to have a statement recorded, the authority gets all the powers under section 246(1) to enforce compliance.

Section 246(1) gives the powers of a court trying a suit under the Code of Civil Procedure, 1908, for discovery and inspection, enforcing attendance and examining a person on oath, compelling production of books and documents, and issuing commissions. Practically, refusal turns an informal visit into a compulsion process.

Can a survey be done to check TDS or TCS?

Yes. Section 253(4) allows an authority, after sunrise and before sunset, to enter an office or other place where business, profession or charitable activity is carried on, or a place where books of account, documents or a computer system are kept, to verify that tax has been deducted or collected at source as per Chapter XIX-B. The authority may require the deductor, the collector or any other person attending to provide technical assistance (including access codes) and furnish information.

As noted, section 253(6) limits this to marking and copying documents and recording statements on oath.

Can the department look into a wedding or event expense?

Section 253(8) allows an authority, considering the nature and scale of expenditure on a function, ceremony or event, to act after the event if it is of the opinion that it is necessary and expedient. It can:

• require the person who incurred the expenditure, or anyone likely to hold the information, to furnish information useful or relevant to any proceeding;
• record statements on oath; and
• use any statement so recorded as evidence in any proceeding under the Act.

This is a post-event enquiry. It does not need a visit to a business place.

The three survey-type powers side by side:

Point	Business survey (253(1), (5))	TDS/TCS verification (253(4), (6))	Event expenditure (253(8))
Entry hours	Business hours for business places; sunrise to sunset for other places	After sunrise and before sunset	Not tied to entering a business place
Mark and copy documents	Yes, 253(5)(a)	Yes	Not listed
Statement on oath	Yes, 253(5)(b)	Yes	Yes, usable as evidence
Impound books	Yes, with recorded reasons, 253(5)(c)	No	Not listed
Inventory of stock	Yes, 253(5)(d)	No	Not listed

Worked example 1: how long can the books stay with the officer?

Assumptions for illustration: a survey is conducted at a trading firm. On Monday, 6 July 2026 (tax year 2026-27) the officer impounds the firm's accounting computer after recording reasons. Two holidays fall in the following days. Because section 253(5)(c) excludes holidays from the count, the 15-day period is counted without them.

Step	Working	Result
1. Days allowed without extra approval	Section 253(5)(c)(i)	15 days, exclusive of holidays
2. Holidays falling in the period (assumed)	Given	2 days
3. Calendar days the officer can hold the computer	15 + 2	17 days, i.e. until 23 July 2026
4. If the officer needs it for day 18 or more	Section 253(5)(c)(ii)	Prior approval of the approving authority is required

The point of the exercise: the clock is counted in non-holiday days, and the extension needs prior approval, not a note after the fact.

Worked example 2: stock check against books

Assumptions: a retailer's books show closing stock of Rs 12,40,000 at cost. During a survey in tax year 2026-27, the officer's inventory of stock at the shop records Rs 9,85,000 at cost. Values are illustrative.

Step	Working	Amount (Rs)
Stock per books	Given	12,40,000
Stock per inventory made under section 253(5)(d)	Given	9,85,000
Difference to be explained	12,40,000 - 9,85,000	2,55,000

The officer cannot take the goods away (section 253(7)), but the inventory and any statement recorded can be used in a proceeding. The shortfall of Rs 2,55,000 would need a documented explanation, such as goods sent for job work, sales not yet billed in the records, or goods at a godown. This article does not say what tax result follows. That depends on the facts and the proceeding.

Real-life example 1: the godown that was not on the list

Ravi runs a hardware shop. During a survey he tells the officer that part of his stock and some purchase files are kept at a godown a few streets away. Under section 253(2), that godown is treated as a place of business for the survey, whether or not he sells anything there. The officer may inspect it. Because section 253(3) applies the open-hours rule to places covered by sub-section (2), the officer enters during the hours that place is open for use; the sunrise-to-sunset limit applies to any other place. Ravi's statement about where records are kept brought that place into the survey.

Real-life example 2: the Inspector and the statement

Meena owns a small trust-run clinic. An Inspector of Income-tax visits during clinic hours and asks the accountant for access to the electronic books. This falls within section 253(1)(i) and the accountant should help. When the Inspector says he will record Meena's statement on oath and impound the laptop, Meena's CA checks the authority. Under section 253(11)(A)(b), an Inspector is an income-tax authority only for sub-sections (1)(i), (5)(a) and (8), so the oath statement and impounding under (5)(b) and (5)(c) call for an authority of the higher ranks. The CA asks to see the authorisation and the approval under section 253(10) for the survey.

What should a business do during a survey? A walk-through

A few practical notes that follow from the text of section 253:

• Statements are recorded on oath and can be used in proceedings, including proceedings begun after the survey (section 253(11)(B)). Accuracy matters more than speed.
• Technical assistance includes access codes. Know who in the firm holds them.
• The officer can copy from a computer system. Ask what was copied.

What are the tax consequences after a survey?

A survey is not only a visit. The Act attaches later consequences to it. In each case below, a survey under section 253(4) (the TDS/TCS verification survey) is carved out.

Consequence	What the Act says	Provision
Reassessment trigger	Information in your case emanating from a survey under section 253 counts as information suggesting that income has escaped assessment	280(6)(f)
No loss set-off	Brought-forward loss or unabsorbed depreciation cannot be set off against undisclosed income included in total income consequent to the survey	120(1)
No updated return	You cannot furnish an updated return for the tax year in which the survey is conducted and any earlier tax year	263(6)(d)(ii)
Presumption on what is found	Books, documents, cash, valuables or electronic records found in your possession or control may be presumed to belong to you and their contents to be true, in any proceeding	524(1)

For example, if a survey in tax year 2026-27 turns up an unrecorded sale, the officer may treat that information as a basis for a reassessment notice under section 280, and the unrecorded income cannot be reduced by your carried-forward losses. See the guides on reassessment and the updated return.

On whether a survey statement can be withdrawn later: section 253(5)(b) allows a statement on oath, and sub-section (8)(c) expressly makes event-expenditure statements usable as evidence. The section text does not say how a survey statement may be retracted, so this article does not state a rule on that. Take professional advice on the facts.

Common mistakes

1. Treating a survey as a search. They are separate powers. A survey cannot remove stock or assets (section 253(7)).
2. Refusing outright. Section 253(9) gives the authority the section 246(1) powers if you refuse or evade. A written request for time or a document list is a better route than refusal.
3. Missing the 15-day clock. Impounded books held past 15 days (exclusive of holidays) need prior approval of the approving authority. Nobody tracks this unless you do.
4. Signing a statement without reading it. Statements recorded under section 253(5)(b) and (8)(b) can be used as evidence.
5. Forgetting the places named in sub-section (2). Where you say records or stock are kept becomes part of the surveyed premises.
6. Assuming the TDS-verification survey allows impounding. It does not (section 253(6)), but records can be marked and copied and statements recorded.

Quick reference

Question	Answer	Provision
Who approves the survey?	Principal DG, DG, Principal Chief Commissioner or Chief Commissioner, prior approval	253(10)
Entry hours, business place	When open for business	253(3)
Entry hours, other place	After sunrise, before sunset	253(3)
Impound without extra approval	Up to 15 days, exclusive of holidays	253(5)(c)(i)
Impound beyond 15 days	Prior approval of approving authority	253(5)(c)(ii)
Removing stock or assets	Never	253(7)
Refusal or evasion	Section 246(1) powers apply	253(9)
TDS/TCS verification survey	Mark, copy and record statements only	253(4), (6)

How does a survey connect to later assessment?

Evidence collected in a survey can feed later proceedings, and the Income-tax Rules, 2026 refer to the survey in two places. Rule 176, on faceless assessment, says that a statement recorded in the course of a survey under section 253 is outside the rule requiring examination and statement recording to be done through video conferencing. Rule 199 says that an order under section 398 (relating to TDS or TCS) is a "specified order" for the section 379 dispute route only if several conditions are met, one being that the order is not based on a survey under section 253 (or a search, requisition or information under an agreement referred to in section 159). Both are narrow technical points, so check them against the order you receive.

How do CA firms prepare clients for a survey?

Much of survey readiness is housekeeping: knowing where books and stock are kept, who holds access codes, and which pending proceedings exist for the client. Finexo's practice management software lets a CA firm keep client notices, proceedings and document locations in one place, with deadlines and reminders. It does not advise on the survey itself.

For another compliance topic under the new Act, see TDS on rent under the Income-tax Act, 2025.

Where this is in the Act

• Section 253(1): entry, and the three requirements on persons attending
• Section 253(2): other places where books, cash or stock are kept
• Section 253(3): entry hours
• Section 253(4) and (6): survey for TDS/TCS verification and its limits
• Section 253(5): mark, copy, oath statements, impound, inventory
• Section 253(7): no removal of assets or stock
• Section 253(8): post-event expenditure enquiry
• Section 253(9): enforcement through section 246(1)
• Section 253(10): prior approval
• Section 253(11): meaning of income-tax authority and proceeding
• Sections 120(1), 263(6)(d)(ii), 280(6)(f) and 524(1): what follows a survey
• Rule 176 and rule 199 of the Income-tax Rules, 2026: references to a survey

This article explains the Income-tax Act, 2025 (as amended by the Finance Act, 2026) and the Income-tax Rules, 2026. It is general information, not tax advice. If you are facing a survey, consult a chartered accountant or tax lawyer.