ITR Filing 2025: CBDT Updates Scrutiny Rules — Know Which Tax Returns Will Face Mandatory Investigation

Updated: 16-06-2025, 03.42 PM

New Delhi: The Central Board of Direct Taxes (CBDT) has introduced significant changes in the Income Tax Return (ITR) scrutiny process for Assessment Year 2024–25. Taxpayers need to stay alert as the board has now made scrutiny mandatory for certain types of ITR filings under Section 143(2) of the Income Tax Act.

ITR Filing

These updated scrutiny rules, part of CBDT’s new compliance framework, aim to improve transparency, ensure accountability, and curb tax evasion. If your case falls under any of the newly notified categories, a scrutiny notice is certain, and it will not be possible to avoid an investigation. However, tax experts suggest that if taxpayers keep the relevant documents and respond accurately to notices, they can avoid penalties or excessive tax demands.

Vivek Jalan, partner at Tax Connect Advisory Services LLP, has explained the implications of these changes and what taxpayers should expect.

Who Will Face Mandatory ITR Scrutiny in 2025?

According to the updated CBDT guidelines, scrutiny is compulsory in the following cases:

1. Survey Cases (Section 133A)

All returns linked to surveys conducted after April 1, 2023, will undergo mandatory scrutiny — except for surveys under Section 133A(2A).

2. Search and Seizure Cases (Sections 132/132A)

If any action under search or seizure provisions has been initiated between April 1, 2023 and April 1, 2025, scrutiny is non-negotiable.

3. Cancelled Tax Exemption Registrations

Institutions whose registrations under Sections 12A, 12AB, or 10(23C) were cancelled before March 31, 2024, will be mandatorily scrutinized.

4. Large Additions in Past Assessments

If your taxable income was increased by over ₹50 lakh in metro cities or over ₹20 lakh in non-metro areas in a past assessment, and you did not appeal or your appeal was dismissed, your return will be flagged.

5. Information from Enforcement Agencies

Any case flagged by legal authorities like the CBI, Enforcement Directorate (ED), or similar agencies will be subject to compulsory scrutiny.

6. High-Risk Transactions Detected by Risk Management System (RMS)

If your return includes suspicious or high-risk financial activity, as identified by CBDT’s automated Risk Management System, you’ll receive a scrutiny notice.

7. Reopened Assessments

If a previously assessed ITR is reopened under Section 147, it will fall under mandatory scrutiny.

Who is Exempt from Mandatory Scrutiny?

While several new categories now fall under the scrutiny net, there are specific cases where mandatory investigation does not apply. These include:

Returns filed in response to notices under Section 142(1) (asking for specific details or documents).
Returns based on data received from AIS (Annual Information Statement), SFT (Specified Financial Transactions), or CPC-TDS (Central Processing Center-Tax Deducted at Source).

Such cases, if selected, will be handled through CASS (Computer-Assisted Scrutiny Selection) — which may or may not lead to detailed scrutiny depending on risk profiling.

Important Takeaway for Taxpayers

If your case meets the conditions set out above, scrutiny is unavoidable and can only be closed with the approval of the Principal Commissioner of Income Tax (PCIT). Experts advise taxpayers to:

Maintain all supporting documents like salary slips, bank statements, investment proofs, and Form 16.
File accurate and complete returns to avoid discrepancies that trigger alerts in the RMS.
Respond quickly and transparently to any notice received from the department.

As the ITR filing deadline approaches, these new scrutiny guidelines from CBDT reinforce the importance of clean compliance and documented financial transactions.

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Kuldeep Singh Chundawat: My name is Kuldeep Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.