What is a scrutiny assessment under Indian Income Tax laws?

A scrutiny assessment is a detailed examination of a taxpayer’s income tax return and supporting documents by the Income Tax department. It involves verification of claims, allowances, exemptions and deductions to determine the correct tax liability. The Assessing Officer can scrutinize various aspects like sources of income, allowable deductions, and compliance with tax laws. The objective is to ensure proper reporting and payment of taxes. Cases are selected for scrutiny based on specific criteria or risk parameters set by the department.