IT Department Flags 1.65 Lakh ITRs for Scrutiny in AY 2025 - 3X Surge Over Previous Years

Last updated: 30 June 2025

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The Income Tax Department is significantly increasing its scrutiny of Income Tax Returns (ITRs) for Assessment Year 2025, flagging approximately 1.65 lakh cases. This represents a three to four-fold increase compared to previous years, driven by advanced data analytics and enhanced integration across financial systems like banks and GST. The department is using tools like CASS and the Risk Management Strategy to identify potential discrepancies such as unexplained cash deposits or mismatches between ITR and GST filings. Taxpayers receiving a notice under Section 143(2) are advised to respond promptly with accurate documentation.

The Income Tax Department has selected around 1.65 lakh cases for scrutiny assessment forAY 2025, marking a significant rise from previous years. This move comes as the department races against the clock to issue scrutiny notices for Income Tax Returns (ITRs) filed in the Financial Year 2024-25, in accordance with the timelines set under the Income Tax Act, 1961. According to official sources, over one lakh scrutiny notices under Section 143(2) have already been dispatched to individuals and co

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FAQ :

Approximately 1.65 lakh Income Tax Returns (ITRs) have been selected for scrutiny assessment for AY 2025.

The surge is due to enhanced data integration across financial systems, improved data analytics, tighter compliance filters, and a strategic push for transparency and tax base expansion.

Common red flags include unexplained cash deposits, substantial bank credits not matching declared income, capital introduced without credible sources, turnover mismatches between ITR and GST filings, and irregularities in merger and acquisition transactions.

A notice under Section 143(2) signifies the commencement of a detailed examination of your Income Tax Return by the department to verify reported income or transactions.

Taxpayers who receive a notice under Section 143(2) should promptly respond with accurate documentation and seek professional support.

This year's scrutiny volume is three to four times higher than the average of 50,000 to 60,000 cases typically seen in FY22, FY23, and FY24.

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CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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