Mandatory scrutiny of ITR: The income tax department publishes the methodology for selecting ITRs for inspection.

A taxpayer can now understand why his or her income tax return (ITR) was selected for scrutiny (close inspection) by the Income Tax Department. This is because the Central Board of Direct Taxes (CBDT) issued recommendations in a circular dated May 3, 2024, that must be followed for the compulsory selection of ITRs for comprehensive inspection for FY 2024-25. "For the past few years, CBDT has issued similar circulars on an annual basis that provide criteria for mandatory/compulsory selection of ITRs for scrutiny, and this circular was recently issued for FY 2024-25." These circulars provide recommendations for the mandatory selection of ITRs for comprehensive inspection, as well as the method for compulsory selection in such specific circumstances," explains Dr. Suresh Surana, founder of RSM India, a tax and business advisory firm.