Scrutiny Assessment Under Income Tax: A Detailed Overview

Scrutiny Assessment Under Income Tax: A Detailed Overview

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Scrutiny assessment under income tax is a crucial process conducted by the Income Tax Department to verify the accuracy of a taxpayer’s filed returns. It ensures compliance with tax laws and prevents tax evasion. Selected cases undergo detailed examination based on specific criteria, such as high-value transactions or discrepancies in financial statements. The assessment process is governed by Section 143(3) of the Income Tax Act, allowing tax authorities to demand additional information or clarifications. Understanding scrutiny assessment helps taxpayers prepare for audits and respond effectively to notices, ensuring transparency in tax filings and compliance with regulations.