For tax assessees, AY 2025-26 is likely to be one of the years with the most significant changes in the way income tax returns (ITRs) are filed. Since the last ITR filing season, the Income Tax Department has introduced several changes, including updates to ITR forms, tax slabs, and other regulations.

The Income Tax Department has now issued new guidelines related to mandatory scrutiny of Income Tax Returns for the financial year 2025-26 (assessment year 2026-27). These guidelines were issued by the Central Board of Direct Taxes (CBDT) on June 14, 2025. It clearly identifies the cases in which income tax officers will do ‘complete scrutiny’ to ensure income tax returns are investigated in depth.

What is ‘complete scrutiny’ of tax returns?

Complete scrutiny means that the Income Tax Department examines the ITR filed by the taxpayer in full depth — in which income, deductions, exemptions, investments and all other financial information are confirmed.

Also read: ITR Filing AY 2025-26: Offline utilities for THESE tax return forms available now

In which cases will there be mandatory scrutiny?

Survey cases (CS01):

If a survey has been conducted under section 133A (except 2A) at a taxpayer’s place after April 1, 2023, then scrutiny of ITR will be mandatory in such cases.

This selection will be made by the Systems Directorate after the approval of DGIT (Systems).

Search and seizure cases (CS02 and CS03):

If a raid or document seizure has been done at a taxpayer’s place under section 132 or 132A between April 1, 2023 and March 31, 2025, then that case will also come under scrutiny.

Claim of exemption despite cancellation of registration (CS04):

If a trust or institution whose 12A, 12AB, 10(23C), or 35(1)(ii)/(iii) registration has been cancelled till March 31, 2024, has still claimed exemption, such cases will come under scrutiny.

Also read: New Income Tax rules: Changes in ITR filing process for Old Tax Regime return filers

Recurring Additions (CS05):

Cases where additions exceeding ₹50 lakh (metro) or ₹20 lakh (other places) have been made in the first assessment and the same have either not been appealed or have survived in appeal.

All such cases will be subject to mandatory scrutiny.

Information received from law enforcement agencies (CS06):

If a taxpayer has received concrete information from CBI, ED or other agencies regarding tax evasion and has filed ITR, then that case will also be automatically selected for scrutiny.

In which cases will there be no mandatory scrutiny?

If a taxpayer files ITR in response to a notice received under section 142(1), and the information has come from AIS, TDS-CPC or SFT system, then this guideline will not apply to him. Such cases will be taken up under CASS (Computer Assisted Scrutiny Selection).

If limited third party information is found in a search, it will not be mandatory to send it to the central circle, unless a senior officer of the department directs so.

Expert opinion:

Vivek Jalan, Partner – Tax Connect Advisory Services LLP says:

“If a taxpayer’s case falls under these prescribed conditions, then there is no way to avoid scrutiny notice under section 143(2). In such a situation, he should keep all the necessary documents ready so that he can avoid potential tax demand by responding on time.”

Also read: ITR Filing 2025: Common mistakes that can cost you big

Important points:

If any of these conditions apply on filing of income tax return, scrutiny notice will be issued by 30 June 2025.

Permission of Principal CIT (PCIT) is mandatory to exclude a case from scrutiny.

NaFAC process will not be applicable in cases of International Taxation and Central Circles.

Summing up…

This new guideline of CBDT is a big step towards making tax administration transparent and objective. It becomes necessary for taxpayers to fill all the details related to their income, exemptions and investments correctly and with evidence, so that there is no confusion during investigation.