Income Tax Scrutiny Rules Explained - Why June 30 Is Crucial for ITRs

It is the statutory deadline for the Income Tax Department to issue scrutiny notices under Section 143(2) for ITRs filed in FY 2025‑26. Taxpayers need to make sure they are correct and reconciled by June 30, 2026 in order to avoid complications.

Why June 30 Matters. The Central Board of Direct Taxes (CBDT) has confirmed that June 30, 2026 is the last date for scrutiny notices of returns submitted in FY 2025-26 to be served.

That deadline ensures taxpayers are informed that their return is to be examined in detail under Section 143(2) of the Income Tax Act.

Categories of Compulsory Scrutiny

According to CBDT guidelines, some ITRs are to be selected for scrutiny:

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Survey cases under Section 133A.

Search and requisition cases under Sections 132 and 132A.

Reassessment cases where notices under Section 148 have been issued.

Entities claiming exemptions or deductions even after cancellation or non-grant of registration.

Cases with recurring income additions upheld in earlier years.

Returns flagged with particular tax evasion information from enforcement or regulatory agencies.

Risk‑Based Scrutiny Parameters

Apart from compulsory cases, returns may also be chosen based on risk indicators:

High-value deposits or transactions not reflected in ITRs.

Discrepancies in declared income and reported financial data.

Information mismatches in Form 26AS, AIS, or TIS.

What Taxpayers Should Do Before June 30

Reconcile financial records: Match ITR data with Form 26AS, AIS, and bank statements.

Correct mismatches: If errors are found, file an updated return although there may be additional tax liability.

Maintain documentation: Keep records of accounts, transaction proofs, and supporting records ready for scrutiny.

In case we are selected, expect a Section 143(2) notice by June 30, 2026.

The June 30 deadline is critical for taxpayers as it marks the cutoff for scrutiny notices. People and businesses must respond accurately and reconcile their returns now with the risk-based categories and parameters and keep them well‑documented. Done properly in this way, the returns will not be contested and, in the future, they can be subject to penalties and have to be re-examined in a more detailed manner.