CBDT Issues Fresh Guidelines for Mandatory ITR Scrutiny in FY 2025-26—Here’s What Triggers It

The Central Board of Direct Taxes (CBDT) has issued fresh guidelines for the compulsory selection of income tax returns (ITRs) for complete scrutiny in Financial Year 2025-26. These guidelines aim to tighten checks on high-risk filings and ensure greater tax compliance. Here's a simplified breakdown of what this means for taxpayers:

Survey-Based Cases
If an income tax survey (under Section 133A) was conducted on or after April 1, 2023, your return will automatically come under full scrutiny.

Search & Seizure Related Returns
Any return linked to a search (Section 132) or document requisition (Section 132A) made between April 1, 2023, and March 31, 2025 will face mandatory scrutiny.

Exemption Claims Under ITR-7
Organizations filing ITR-7 and claiming exemptions under Sections 12A, 12AB, or 10(23C) will be scrutinized if their exemption was not approved, withdrawn, or cancelled by March 31, 2024, unless reversed on appeal.

Recurring Tax Additions
If your past assessments had recurring additions of over ₹50 lakh (in metro cities) or ₹20 lakh (elsewhere), and those additions were upheld or finalized, your return will be examined again.

Tax Evasion Intelligence
Returns flagged through specific tax evasion alerts from regulatory or law enforcement bodies will be taken up for scrutiny.

Important Deadline
All scrutiny notices under Section 143(2) for returns filed in FY 2024-25 must be issued by June 30, 2025.

The CBDT’s new rules tighten focus on returns involving surveys, searches, exemption claims, large additions, or tax evasion signals. Taxpayers should ensure accuracy and compliance to avoid scrutiny under these parameters.