ITR Filing For AY 25-26: CBDT Rolls Out New Rules For Scrutiny Of ITRs In AY 2025-26

Shortly into the tax filing season, the Central Board of Direct Taxes (CBDT) has rolled out a fresh set of rules that detail who will face compulsory scrutiny of their income tax returns in the current financial year (FY 2025-26). The guidelines, released on June 13, outline the exact conditions under which taxpayers, including individuals or entities, can expect their ITRs to be flagged for full assessment.

This is not part of the usual risk-based scrutiny but mandatory checks, and the criteria are non-negotiable.

Returns Could Be Triggered by Survey and Search Actions

According to the new circular issued by CBDT, if there’s been a tax survey on or after April 1 2023, under Section 133A of the Income-tax Act, 1961, the return will automatically be selected for scrutiny. The same applies if a search (under Section 132) or a requisition (under Section 132A) happened between April 1, 2023, and March 31, 2025.

Once a notice under Section 143(2) is issued in such cases, the ITR must be shifted to the Central Circle or Central Charges, basically, the department’s specialised units, within 15 days. This process is clearly laid out in the official circular.

Exemption Claims Without Valid Registration

Entities filing ITR- form 7, particularly trusts or institutions claiming tax exemption under provisions, such as Sections 12A, 12AB, or 10(23C), will be under the scanner if their registration was either not granted, cancelled, or withdrawn by March 31, 2024. The only exception is if the cancellation was later reversed on appeal.

So, if someone files a return claiming exemption without a valid registration as on the cut-off date, it’s a straight route to scrutiny.

Recurring Disputes That Have Become Final

Another set of cases that will face scrutiny involve past additions that have become final or have been upheld by appellate authorities. There is a monetary threshold here. If the recurring addition in earlier assessments exceeds Rs 50 lakh in big metros (such as Delhi, Mumbai, Bengaluru, etc.) or Rs 20 lakh in other places, the return will be flagged again.

This applies even if the issue is the same one being repeated across years, say a deduction disallowed earlier, and again claimed this year.

Cases Flagged by Enforcement or Regulatory Agencies

If a law enforcement agency, a financial regulator, or any similar authority sends over specific information pointing to possible tax evasion, and the taxpayer has filed a return for that year, such return will be subject to a full scrutiny. This is usually an established protocol, but now it has been formally codified into the selection criteria.

Who’s Doing What

According to the circular, selections based on survey and registration matters will be handled by the Directorate of Income Tax (Systems). In contrast, local assessing officers (AOs) will identify the recurring additional cases and those flagged by enforcement inputs, but even they need the green light from senior officers before issuing notices.

For cases falling under international taxation or Central Circles, the relevant specialised units will manage the process directly.

Important Deadline

If your ITR for FY 2024–25 (that is, AY 2025–26) falls under any of these categories, and it is going to be scrutinised, the notice under Section 143(2) will have to be served by June 30, 2025.

Also, the tax officials have left no room for ambiguity this time. The criteria are clear, and the selection is automatic once the relevant boxes are ticked. For anyone falling into these brackets, it is advisable to double-check one’s ITR before submitting it. Also, in case one receives a notice from the income tax department for a scrutiny, then one should keep the paperwork handy.