Income Tax Returns: Which Are The ITR Discrepancies That Can Trigger Investigations?

As the Income Tax Return (ITRs) filing season has already started, it is essential to report all your earnings accurately with transparency.  While filing ITR for FY 2024-25 (Assessment Year 2025-26), it's important to avoid errors and misreporting.

While most returns are processed without any issues, even a minor discrepancy can sometimes trigger an investigation by the Income Tax Department.

Here's a look at key areas where you could face scrutiny or investigation from the Income Tax Department after filing your ITR.

1. Survey Cases (CS01)

The ITR filed by the assessee will definitely be checked if the Income Tax Department conducts a survey at the taxpayer's premises under Section 133A. This rule came into effect on April 1, 2023. 

2. Discrepancy In ITR

If there is a discrepancy in the amounts, then your ITR details might be investigated further. The discrepancies can occur if you failed to report some income, such as interest from FDs, or if you filed a deduction under the incorrect provisions or without adequate proof.

3. Recurring Additions (CS05)

If the I-T Department earlier noticed that you concealed a large amount of income and you didn't appeal or you lost an appeal, then your next ITR will be under scrutiny. The amount should not exceed Rs 50 lakh in metro cities and Rs 20 lakh in non-metro cities.

4. TDS Amount Error

Any discrepancy in the TDS amount tends to be one of the most common errors in ITR filing. This happens when your employer makes a mistake or forgets to file the correct TDS; then the tax sleuths may delay processing your return.

5. Search And Seizure Cases (CS02 and CS03)

If the taxation body has ever raided someone's house or office or seized any documents under Section 132 or 132A between April 1, 2023, and March 31, 2025, then the ITR will be investigated.

6. Investments In The Name Of Spouse

Some taxpayers try to save on taxes by buying property or other investments in the name of their spouse or children. But, as per Section 64 of the I-T Act, 1961, if you paid the amount for that investment, even if it's not in your name, then you still have to pay the tax, as the amount is paid from your income.

7. Information Received From Law Enforcement Agencies (CS06)

If the Income Tax Department receives information from agencies, like the CBI or ED, that someone has hidden income or evaded taxes, then their ITR will automatically come under further investigation.