Income Tax Return Alert: 5 Types of ITRs Under Scrutiny in FY 2025-26—Notice Likely by June 30

If you're planning to file your Income Tax Return (ITR) for the assessment year 2025-26, be prepared for stricter scrutiny. The Income Tax Department has rolled out a new set of rules that could trigger detailed examination of ITRs in five specific scenarios. Taxpayers falling under these categories may receive a scrutiny notice by June 30, 2025.

The Central Board of Direct Taxes (CBDT) released fresh guidelines on June 14, 2025, outlining how the department will thoroughly assess income declarations, exemptions claimed, investment disclosures, and tax deductions.

ITR 2025-26: What's New This Year?

The assessment year 2025-26 comes with several changes:

• New ITR forms have been introduced.

• Tax slabs have been revised.

• Rules regarding deductions and disclosures have been tightened.

But the most impactful change? Enhanced scrutiny measures that will apply in five specific types of cases.

Let’s understand what triggers a detailed review of your ITR.

These 5 Categories Will Be Subject to ITR Scrutiny

1. Cases Where Tax Survey Was Conducted

If an Income Tax survey (under Section 133A) was conducted at your premises on or after April 1, 2023 (excluding clause 2A), your ITR will automatically come under scrutiny. The department will examine all returns for any inconsistencies or misreporting.

2. Search or Seizure Cases

If you were subject to an Income Tax raid or document seizure (under Section 132 or 132A) between April 1, 2023, and March 31, 2025, your return will undergo mandatory scrutiny. The authorities will match declared income against seized evidence.

3. Claiming Tax Exemption Despite Cancelled Registration

If a trust or institution whose registration under Section 12A, 12AB, 10(23C), or 35(1)(ii)/(iii) was cancelled by March 31, 2024, and still goes on to claim tax exemptions, it will face strict assessment. This applies even if the cancellation was under appeal.

4. Significant Income Addition in Past Assessments

If in any previous assessment, your declared income was increased by ₹50 lakh (metro cities) or ₹20 lakh (non-metro) and:

• You did not appeal, or

• You lost the appeal,

then your current return will be reviewed again for inconsistencies. This is intended to catch repeated under-reporting of income.

5. Cases Flagged by Investigative Agencies

If agencies like the CBI, Enforcement Directorate (ED), or other government bodies have shared evidence indicating possible tax evasion, and you have filed ITR, your return is likely to be scrutinized.

Notice Deadline and Exemptions

• If you fall under any of these five categories, you can expect to receive a notice by June 30, 2025.

• To exclude a case from scrutiny, approval from the Principal Commissioner of Income Tax (PCIT) is mandatory.

• For cases related to international taxation and central circles, the NaFAC (National Faceless Assessment Centre) rules will not apply. These will be handled through conventional processes.

Why This Matters to You

The I-T department’s focus is now more aligned toward high-risk profiles and past non-compliance patterns. With technological integration and data-sharing across agencies, evasion is easier to detect than ever before.

If you fall into any of these five categories, it's crucial to ensure full transparency in your tax return. Double-check all details related to:

• Reported income

• Claimed deductions

• Investments

• Asset declarations

Final Word: Don’t Take Your ITR Lightly This Year

The tax department is leaving no stone unturned in identifying inconsistencies. If you're a taxpayer with a complex or flagged profile, now’s the time to:

• Consult a tax expert

• File early

• Avoid errors and misreporting

Failing to do so may result in a scrutiny notice, penalties, or even legal action.

Make sure you file your ITR with utmost accuracy—because in 2025-26, the margin for error is smaller than ever.