This paper presents a new technique based on comparison method of testing to distinguish an annealed magnetic sample from a non-annealed sample of same dimensions. In order to perform this test, a suitable magnetic fixture that can accommodate test samples of various inner and outer diameters has been developed and described in the paper. The paper also gives details of a virtual instrument that has been developed to perform the comparison method of testing for the annealed samples. Using the developed instrument, the samples can be tested after the manufacturing process without any further machining. The performance of the developed instrument has been verified by conducting measurements on different samples of known magnetic properties. The instrument developed distinguished the annealed samples from the non-annealed samples accurately. © 2011 IEEE.