What are the reasons that can trigger a tax audit?

There are several reasons that can trigger a tax audit by the Income Tax Department, including high-value transactions, mismatch between income and expenditure, cash deposits not matching known sources, discrepancies in TDS/TCS deductions, suspicious trading entries, claims of substantial losses or deductions, etc. Tax authorities may also select cases based on computer-assisted risk analysis or third-party data available with them. However, the reasons are not limited to these and the department has wide discretionary powers to initiate audits.