Compulsory Income Tax Scrutiny Guidelines for Financial Year 2025-26:

Compulsory Income Tax Scrutiny Guidelines for Financial Year 2025-26 On June 13, 2025, the Central Board of Direct Taxes (CBDT) under the Ministry of Finance released detailed guidelines for compulsory scrutiny of taxpayers' income tax returns (ITRs) during the assessment year 2026-27 (financial year 2025-26). These rules provide guidelines to tax officers on which types of returns should be mandatorily taken up for deep inspection. Complete scrutiny is when the Income Tax Department conducts a thorough inspection of a taxpayer's ITR, including verifying income, deductions, exemptions, and all other financial details submitted.

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Key Cases That Will Be Picked for Compulsory Scrutiny

Survey Cases (CS01):

• Returns of taxpayers where a survey under Section 133A (except 133A(2A)) was conducted on or after April 1, 2023. These cases will be selected by the Systems Directorate with approval from the DGIT (Systems). If the case is not considered under Central Charges, it must be transferred there within 15 days of notice.

Search and Seizure (CS02 & CS03): Taxpayers who were subject to a search (Section 132) or requisition (Section 132A) between:

• April 1, 2023–August 31, 2024 (CS02)
• September 1, 2024–March 31, 2025 (CS03)

These need prior approval from higher tax authorities and must be transferred to Central Charges. Registration Withdrawn Cases (CS04):

• Taxpayers who had registrations under sections like 12A, 12AB, 35(1)(ii)/(iii), or 10(23C) cancelled on or before March 31, 2024, but still claimed deductions in their ITRs. These returns will be selected through the Systems Directorate.

Recurring Additions (CS05): If there were repeated additions (above Rs. 50 lakh in metro cities or Rs. 20 lakh elsewhere) made in earlier assessments on the same issue, and these additions were either

• Not appealed
• Upheld on appeal
• Then these cases will also be compulsorily scrutinised.

Information from Law Enforcement (CS06):

• If specific information about tax evasion is received from any law enforcement or regulatory agency, and the taxpayer has filed the return, the case will be picked for scrutiny.

Clarifications:

• Returns filed in response to a Section 142(1) notice due to data from systems such as AIS, TDS-CPC, or SFT will not be compulsorily scrutinised. Instead, they may be picked under CASS (Computer Assisted Scrutiny Selection).
• Certain Section 148 (reassessment) cases, especially those connected to search/survey actions after April 1, 2021, will also be handled accordingly, sometimes by Central Charges.
• If information discovered in a search relates to a third party with limited connection, it is not compulsory to refer those cases to Central Charges unless advised.

Special Note for International Taxation & Central Circles:

• These officers will deal with their own scrutiny cases in accordance with the guidelines and do not have to follow the route through NaFAC (National Faceless Assessment Centre).

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Time Limit:

• As per the Income Tax Act, a scrutiny notice to be issued for returns filed in FY 2024-25 needs to be issued by June 30, 2025.

Refer to the official guidelines for complete information.