CBDT Tightens Scrutiny of Top Advance Tax Payers to Curb Bogus Exemption Claims in FY 2025-26

The CBDT has issued strict monitoring guidelines for top advance tax payers (those paying ₹1 crore+ annually) to prevent bogus exemption claims in FY2025-26. The directive mandates real-time reconciliation of advance tax payments with financial statements through the upgraded ASTRA system. Assessing officers must verify large exemption claims (exceeding 20% of book profits) within 15 days of return filing through special scrutiny units. The move targets abuse of provisions like Section 80JJAA (employment generation) and 80-IAC (startup benefits) by ineligible claimants. The department will use AI tools to flag discrepancies between advance tax patterns and final liability declarations. Tax experts warn this may delay refunds for genuine claimants as officers exercise heightened caution. The circular also requires principals of large firms to submit personal affidavits for major exemption claims, making them accountable for misrepresentations. This forms part of the government's broader anti-evasion measures amid tightening fiscal conditions.