As the income tax filing season for FY 2025-26 (AY 2026-27) is underway, the Central Board of Direct Taxes (CBDT) has released new guidelines on how cases will be selected for scrutiny.
These rules define which taxpayers may face detailed examination by the Income Tax Department based on risk factors, past records, and reported discrepancies.
The aim is to focus scrutiny on high-risk cases while avoiding unnecessary checks for routine filings.
Who Can Be Selected for Mandatory Scrutiny?
According to the CBDT’s latest framework, certain categories of taxpayers may be automatically selected for detailed scrutiny.
Taxpayers Already Surveyed
If an individual or business was covered under a tax survey under Section 133A on or after April 1, 2024, their return can be picked for compulsory scrutiny.
This applies to cases where the department has already conducted on-ground verification.
Search, Raid, or Requisition Cases
Taxpayers who were subjected to search operations, raids, or document requisitions after April 1, 2024, may also face detailed assessment.
These cases are considered high-risk from a compliance perspective.
Reopened Assessments
If the Income Tax Department issues a notice under Section 148 for reassessment, the return may be scrutinized again.
This usually happens when there is a suspicion of income escaping assessment.
Charitable Trusts Losing Tax Benefits
Charitable institutions and trusts whose tax exemptions or approvals have been cancelled or withdrawn may come under scrutiny if they still claim benefits in their returns.
High-Value or Repeated Additions in Past Cases
Taxpayers who have faced significant tax additions in earlier years on recurring issues may also be selected.
The threshold for such scrutiny includes:
More than ₹50 lakh in metro cities like Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata, Pune, and Ahmedabad
More than ₹20 lakh in other locations
Cases Flagged for Possible Tax Evasion
Taxpayers may also be selected if:
Investigation wings or intelligence units provide specific inputs
Law enforcement agencies report suspected tax evasion
Regulatory bodies share credible financial irregularity data
In such cases, the department may conduct a deeper review of returns and transactions.
Who Is Less Likely to Face Scrutiny?
CBDT has clarified that not all returns will be subject to detailed examination.
Taxpayers who simply respond to routine notices related to:
AIS (Annual Information Statement)
SFT (Specified Financial Transactions)
TDS mismatches
will not automatically be selected for scrutiny unless they fall under the high-risk categories mentioned above.
Key Takeaway
For FY 2026-27, income tax scrutiny will be focused mainly on high-risk cases such as survey or raid subjects, reassessment cases, high-value tax additions, and suspected evasion reports.
Routine returns and minor data mismatch corrections are generally not expected to trigger compulsory scrutiny, giving relief to most regular taxpayers.
