Scrutiny Cases

Scrutiny is the process of selecting some income-tax returns and examining them closely by calling for extra information and seeing if the details furnished are correct. It is a verification of income in the income-tax return filed by the taxpayer to assess his real tax liability.

If Tax Man Comes Calling:
AIR (annual information return)
CASS(computer assisted selection scrutiny)

In case a discrepancy is found, the ITO calls for the further information. The following steps can be taken from the beginning itself to AVOID A SCRUTINY:


 Do not borrow cash loan beyond Rs. 20000/- .Loan beyond Rs. 20000 should be in cheque/DD
 Each receipt entry in your bank account should be self explanatory
 The object/purpose of any cash/cheque deposited in your account and which is not part of your income should be clear.
 Gift in excess of Rs. 50000 from any person (other than relatives as specified I IT rules) is taxable. The purpose of such     a gift should be clear.
 Make sure that in case of joint account, transactions made in respect of each account holder have been accounted for.
 Income from house property by way of rent should be taken into account of owner of properties.
 If re-investing long term capital gain arising out of sale of property, please ensure that the property has been held for at     least a period of 3years or more.

Inform us in case of the following:

 Property sale/purchase more than Rs. 30 lakhs
 Payment of 2 lakhs or more through credit card
 Purchase of mutual funds more than 2 lakhs
 Cash deposits more than 10 lakhs in a year.

Remember Scrutiny is for a particular financial year and the queries relate to that period.

Please get in touch with us if you receive notice u/s 143(2). Send us a copy of the notice along with the affidavit as per following specimen

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