Supplemental assessment

A supplemental assessment is a follow-up action by the tax authority that addresses issues overlooked or incorrectly handled during the initial assessment. It is used when the earlier assessment did not fully reflect the taxpayer’s actual position—whether due to missing information, errors, or income that was not properly considered. Rather than replacing the original assessment, the supplemental assessment adjusts or adds to it so that the final tax liability reflects the correct figures.

Example: Suppose a business undergoes its regular assessment, but later the department notices that certain income—such as ₹10 lakh from a contract—was not reported, or that a deduction of ₹2 lakh was claimed without eligibility. Because the original review missed key details, the department may issue a supplemental assessment to account for the discrepancies.