What is Scrutiny Assessment in Income Tax?

In income tax, the scrutiny assessment is the process where the tax authorities closely check a person's tax return to make sure everything is correct and follows the rules. They look at the income reported and the deductions and exemptions claimed to ensure the right amount of tax is paid. This is the simple answer to your query about what is scrutiny assessment in income tax.

What is Scrutiny in Income Tax?

Scrutiny in income tax refers to the process where the tax authorities perform a detailed review of a taxpayer's return to ensure accuracy and compliance with tax laws. This process checks the reported income, deductions, and exemptions to confirm that the correct amount of tax has been paid. 

Section 143(3) defines what is Income Tax Scrutiny vividly. It involves certain adjustments, like:

• Correction of Arithmetical Errors

• Identification of Incorrect Claims

• Disallowance of Loss Claimed

• Disallowance of Expenditure Not Accounted in the Total Income

• Disallowance of Certain Deductions

• Addition of Income Not Included in the Return

Now be aware that a scrutiny assessment under Section 143(3) can be initiated when:

• You file an IT return as per Section 139 or respond to a notice under Section 142 or when

• The assessing officer or IT authority feels that it is necessary to audit your return and make sure that the income reported and taxes paid are true

I have shared all the major details on scrutiny in income tax here and I hope these were helpful.

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