As children getting caught doing something wrong by our parents, while had consequences, it was not drastic. However, as adults getting caught doing something wrong, whether intentionally or intentionally can land you in deep trouble. When filing your annual tax return, mistakes can occur and there are few individuals, who willingly hide certain details. To counter discrepancies in tax returns filed by taxpayers, the ITD follows scrutiny selection criteria to decipher which returns need further clarification, which we will be discussing in this guide.
A Scrutiny Notice is a random notice issued by the Income Tax Department under section 143(2), in case if Assessing Officer(AO) finds some mistakes or has doubts regarding an individual’s income. Scrutiny Assessment is done under section 143(3). Let us now discuss about the criteria for selection of Scrutiny.
During the scrutiny assessment, the concerned AO will try to find out whether the reported income, deductions and claims, etc. made by you in your tax return are genuine and correct. Generally, everyone’s tax return can be subjected to scrutiny. There were times when scrutiny was taken up on everyone, but now that they have set criteria, scrutiny is picked on a random basis.
This criterion is given under Instruction No. 05/2017 Government of India Ministry Finance Department of Revenue, CBDT Subject to this Instruction: Guidelines for selection of cases for scrutiny during the financial-year 2017-2018-regd:
Selection of Cases for Scrutiny Assessment
Any scrutiny notices received should not be ignored. There must be an immediate response/action taken. If you have received any notices and are worried about how to respond to it, get in touch with our highly qualified tax experts at H&R Block India who will resolve your issues/concerns efficiently and in a timely manner.