Six reasons due to which ITR fillers can face Income Tax Scrutiny in 2026

As the income tax filing for FY 2025-26 has begun, the tax department has released some new guidelines for tax scrutiny for cases of this tax year. These rules outline criteria and processes for choosing cases that the income tax department will examine in-depth.

In FY 2026-2027, who may be chosen for mandatory income tax scrutiny?

The Income Tax Department may automatically choose the following taxpayers for detailed scrutiny according to the CBDT’s latest guidelines:

1. The Income Tax Department’s Survey of Taxpayers

Returns of individuals or businesses that were subject to a tax survey under Section 133A on or after April 1, 2024, could be selected for compulsory scrutiny.

2. Taxpayers at Risk of Raid or Search

A taxpayer’s returns may be selected for detailed examination if the income tax department performed a search, raid, or requisition action against them on or after 1 April 2024.

3. Tax Department Reopened Cases

If the department has issued a reassessment notice under Section 148 for suspected income escaping assessment, returns may be examined.

4. Institutions and Charitable Trusts Whose Tax Benefits are Lost

Those entities who continue to claim tax exemptions or deductions in their returns even after their tax-exempt registration or permission is withdrawn or revoked or denied, could be subjected to compulsory scrutiny.

5. Taxpayers with Huge Additions in Earlier Years’ Assessments

Returns may be selected in cases where a taxpayer has faced huge tax additions in the earlier years due to a recurring issue and those additions have been sustained or become final.
The limit is more than Rs 50 lakh in major cities such as Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata, Pune and Ahmedabad and Rs 20 lakh elsewhere.

6. Cases of suspected tax evasion

If law enforcement agencies, investigative departments, intelligence agencies or regulatory authorities receive specific information indicating tax avoidance, taxpayers may be selected for scrutiny.

Who is unlikely to be selected under these rules?

The CBDT has clarified that unless they are part of any of the above risk categories, returns submitted in response to routine alerts on data inconsistencies in AIS, SFT, TDS records or other information systems will not be automatically selected for mandatory scrutiny.