CBDT Scrutiny Guidelines: These Tax Returns May Face Mandatory Checks In FY 2026-27

The Central Board of Direct Taxes (CBDT) has issued fresh guidelines for selecting income tax returns for compulsory scrutiny during FY 2026-27. The move means that some categories of taxpayers and entities may automatically come under detailed examination by the Income Tax Department if their cases fall within the specified conditions.

Compulsory scrutiny is different from routine risk-based checks. In ordinary cases, a return may be picked up because the tax department’s system detects a mismatch, unusual claim, or data-related red flag. In compulsory scrutiny, however, the case is selected because it falls under a category already identified by the CBDT.

Once a return is selected, the taxpayer may receive a notice under Section 143(2) of the Income-tax Act. The taxpayer will then have to provide documents, explanations, records, and other details sought by the department. In most cases, assessments are carried out through the faceless assessment system, according to a recent report by Mint.

Survey, Search, And Reassessment Cases

One important category covers taxpayers whose premises were subjected to a survey under Section 133A on or after April 1, 2024. Such cases may be picked up for compulsory scrutiny irrespective of whether the return itself shows any clear discrepancy at the filing stage.

Taxpayers who have faced a search under Section 132 or a requisition under Section 132A on or after April 1, 2024, will also come under mandatory scrutiny. In search or requisition cases initiated on or after September 1, 2024, the scrutiny will be limited to the assessment year covered under Section 158BA(6).

Another category includes reassessment cases where a notice has been issued under Section 148. Such notices are generally issued when the tax department believes that income chargeable to tax may have escaped assessment. Once such a notice is issued, the case may be selected for complete scrutiny.

Trusts, Tax Disputes, And Evasion Inputs

The CBDT guidelines also cover certain ITR-7 filers. These include charitable trusts, religious institutions, and other entities that continue to claim exemption or deduction even after their registration, approval, or recognition has been denied, cancelled, or withdrawn on or before March 31, 2025.

This can cover claims under Sections 12A, 12AB, 10(23C), and 35 of the Income-tax Act. However, cases where the cancellation or withdrawal has later been reversed by an appellate authority will not be covered under this category.

High-value recurring disputes may also trigger scrutiny. If additions made in earlier years on a recurring question of law or fact have become final, or have been upheld in favour of the tax department by appellate authorities, the return may be picked up. The threshold is more than Rs 50 lakh in metro jurisdictions such as Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, and Pune. For other jurisdictions, the threshold is more than Rs 20 lakh.

The sixth category includes cases where specific information suggesting possible tax evasion has been received from law enforcement agencies, intelligence units, investigation wings, regulatory bodies, or other government authorities. Such information may relate to undisclosed income, suspicious transactions, bogus claims, benami arrangements, foreign assets, or other possible tax non-compliance.

What Taxpayers Should Keep In Mind

For most ordinary taxpayers, this does not mean that every income tax return will be checked in detail. The guidelines are meant for specific categories where the tax department wants mandatory examination.

However, taxpayers should still ensure that the information reported in the return matches details available in Form 26AS, AIS, TIS, bank statements, capital gains statements, and other financial records. A mismatch may still invite questions from the tax department later, even if the return is not picked for compulsory scrutiny.

As per the guidelines, notices under Section 143(2) for returns filed in FY 2025-26 have to be issued by June 30, 2026, in most cases. If the notice does not come within the allowed time, the return usually cannot be taken up for scrutiny under these rules.

Taxpayers should not look at return filing as a salary or business-income exercise alone. Claims on exemptions, deductions, capital gains, foreign assets, large transactions, or old tax disputes should be reported carefully and backed by proper records.

FAQs

What is compulsory scrutiny of an ITR?
Compulsory scrutiny means the return is picked for detailed checking because it falls under a category specified by CBDT, not just because of a system mismatch.

Which taxpayers may face compulsory scrutiny in FY 2026-27?
Cases involving survey, search, reassessment notices, certain ITR-7 filers, high-value recurring tax disputes, or specific tax evasion inputs may be selected.

Does this mean every taxpayer’s return will be checked?
No. The guidelines apply only to specified cases, but all taxpayers should still ensure their return matches Form 26AS, AIS, TIS, and other records.