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Different Methods to verify Income Tax Returns

Filing Income tax returns is a mandatory compliance for all eligible individual and non-individual taxpayers in India. According to Section 140 of the Income Tax Act, 1961, a tax return filed to the Income Tax Department is considered to be valid only if it is filed after being verified by the taxpayer in the manner and mode prescribed under the act. A successful verification of the tax returns guarantees the authenticity of the details furnished to the Department of Income Tax, related to the income, sources of income, and the tax liabilities of taxpayers. The purpose of this article is to elaborate on the need, eligibility, and ways in which taxpayers can verify their income tax returns, and the detailed procedure prescribed for the same.
Verifying Income tax returns used to be a time consuming and cost inefficient process restricted to the offline mode only, until a recent announcement made by the Indian Government, whereby it has introduced several easier, faster, simpler, and cost effective methods of ITR verification carried out in a completely online mode. Verification under such methods shall be based on OTPs and EVCs sent to the registered or linked mobile number and e-mail IDs of tax paying assesses. The announcement shall come into effect from August 2022.
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What is verification of Income Tax Return all about?

The Income tax returns of an individual, partnership, or a company must be verified in accordance with section 140 of the Income Tax Act, 1961. The verification of the ITR ensures that the details furnished by taxpayers and assesses in their returns are absolutely authentic.
After verification, the income tax returns of the assesses are submitted to the Income Tax Department. The IT department is required to process the returns filed, and issue intimation and assessment orders for the same. If the assesses does not receive any orders of intimation or assessment from the IT department, the acknowledgment document received as a result of ITR verification can be considered as the assessment order on the ITR.

Who is responsible for verifying the Income Tax Return?

The responsibility to verify the income tax returns rests on the entities filing such returns. The conditions for the eligibility of entities to file and verify ITR has been mentioned in Section 140 of the Income Tax Act.

Forms for filing and verifying Income Tax Returns

ITR-1 is filed by salaried employees whose annual income does not exceed Rs.50 Lacs. According to sections 139(1), 139(4), and 139(5) of the Income Tax Act, employees themselves are responsible for filing their returns in form ITR 1. However, if the employee concerned is a foreigner, or if he is unable to verify his ITR for reasons other than mental incapacity, he can authorise another individual for verifying his ITR. In case the employee is mentally incapable to verify his ITR, he must get it verified by his legal guardian only.
ITR-2 can be filed by individual taxpayers or Hindu Undivided Families (HUFs) whose source of income does not arise from any business or profession. Accordingly,

1 – If ITR-2 is being filed by individual taxpayers, its verification can be done either by the filer. However, if the concerned individual is a foreigner, or if he is unable to verify his ITR for reasons other than mental incapacity, he can authorise another individual for verifying his ITR. In case the individual is mentally incapable to verify his ITR, he must get it verified by his legal guardian only.

2 – If ITR-2 is filed by an HUF, it can be verified by the Karta (head) of the HUF, or by any other adult member of the family if the Karta is mentally incapable.
ITR-3 is filed by individual taxpayers whose sources of income arise from their businesses or professions. The returns can be verified by the filer or any other individual authorised by the filer if he is unable to verify the returns due to reasons other than mental incapacity. If the filer is unable to verify his returns due to mental incapacity, his legal guardian can verify his returns on his behalf. Note that a proprietor is also required to file ITR 3 as all his income is sourced from his proprietorship business only. In this context, the returns would either be verified by the proprietor or any other person authorised by him.
ITR-4 is filed by individuals and HUFs who have opted for the Presumptive scheme of taxation under section 44AD, 44AE, or 44ADA of the Income Tax Act, 1961. If the filer is an individual assessee, he must verify his returns himself. However, if the filer is an HUF, its Karta (Head) is responsible for verifying its returns.
ITR-5 is filed by Partnership firms, LLPs, AOPs or BOIs. In the case of Partnership Firms, the returns are filed and verified by any of its managing partners. In the case of the Limited Liability Partnership (LLP), the returns are filed and verified by any of its designated partners. In the case of the Body of Individuals (BOI) and Association of Persons (AOPs), the returns are filed and verified by the principal member or officer of the BOI and in the case of Association of Persons (AOP) the returns are filed and verified by the member or the principal officer of the AOP
ITR 6 is filed by companies or the persons required to file ITR under sections 139(4A), 139(4B), 139(4C), and 139(4D). If the company has a managing director then ITR-6 shall be filed and verified by him. However, in the absence of a Managing Director, the ITR of the company can be filed and verified by any other director of the comapny.
ITR 7 is filed by trusts, political parties, news agencies, or other institutions under sections 139(4A), 139(4B), 139(4C), and 139(4D) of the Income Tax Act, 1961. Returns in form ITR 7 are filed and verified by the principal officer or the competent authority of the concerned institution.

Types of ITR verification

The verification of Income Tax returns can be done either by submitting ITR-V form to the Centralized Processing Center or conducting an OTP or EVC-based verification.

ITR-V based verification

In case taxpayers filing the income tax returns do not have any of the following,
  1. Their Aadhar linked to their PAN
  2. An active net banking enabled bank account
  3. An active Demat account
They shall have to conduct their ITR verification by submitting ITR-V directly to the Headquarters of Centralized Processing Center located in Bengaluru.
Do’s and Don’ts for ITR V based verification 
  1. The ITR-V must be sent in paper form to the CPC, Bangalore office. 
  2. The ITR-V must be duly signed in blue ink.
  3. Earlier, ITR V was required to be submitted to the office of CPC within 120 days from the date of filing the ITR. This limit has now been reduced to just 30 days with effect from 1st August 2022.

OTP or EVC-based ITR verification

A more efficient method of ITR verification is based on OTP or EVC, whereby an EVC or OTP is sent to the registered mobile number of the assessee. This OTP or EVC is required to be furnished by the assessee in the verification window that opens after the “e-Verification” option is clicked. The detailed procedure for OTP or EVC based method of verification has been discussed in detail later in this article.

What are the different methods of Online ITR verification?

To make ITR verification easier, effortless, and simplistic, different methods of online ITR verification have been provided on the income tax portal. Listed below are all such methods of online ITR verification.

Aadhaar-based OTP verification

If the Aadhar of the filer is linked with his PAN card and his registered mobile number, he can get his returns verified in no time, using the Aadhar OTP based method. The complete procedure of the Aadhar-based ITR verification has been mentioned below.
Step 1
The assessee must first log in to his Income Tax PAN account by entering his PAN number and password in the income tax login window.
Step 2
Next, the assessee is required to click on the menu icon. A drop down will pop on the screen. Click on the “E-File'' option, and then on the “Income Tax Return” option, followed by the “ E-verify” option.
Step 3
After clicking on the 'e-verify' option, the assessee is required to fetch the ITR which he wishes to verify, and then click on the E-Verify button for which
Step 4
Next, the assessee must click on the “I would like to verify using OTP on the mobile number registered with Aadhaar” option and follow the on-screen instructions to begin the process.

Digital Signature Certificate-based OTP verification

Another OTP-based verification is facilitated by the Digital Signature Certificate-based verification facility. The stepwise process of verification using the DSC-based OTP method has been mentioned below.
Step 1
Log in to your Income Tax account by entering the login credentials.
Step 2
Now click on the 'E-File' option from the menu resembling and choose the “Income Tax Returns” options from the dropdown that appears on the screen.
Step 3
Next, click on the “E-verify'' option. The assessee will be redirected to the window where “I would like to verify using Digital Signature Certificate (DSC)” shall be displayed. Click on this option, followed by clicking on the check box with the message “I have downloaded and installed the E-signing utility”. Click on the “Continue” button displayed on the bottom-right corner of the screen.
Step 4
Finally, click on the “Sign” button, select your DSC provider, and upload the file containing the DSC to complete the OTP-based ITR verification.

Verifying the ITR using EVC generated through the ATM facility

You can also verify your ITR using the EVC generated through the ATM facility. For this, you shall have to visit your nearest ATM. On the ATM screen, select the ITR verification option after navigating the ATM console. You now have to select the “Generate PIN” option by following the instructions on the screen. An EVC will be sent to your registered mobile number and email which you will have to enter in the window to begin the process of verification.

Choosing the EVC option by means of your bank account linked to your Income Tax profile

Alternatively, you may verify your ITR using the EVC generated through the bank account linked with your mobile number. For the process to succeed, your bank account must be EVC-enabled as well. You just have to select the “EVC-based verification” option appearing under the “Bank Account” option, after which an EVC will be sent to your registered mobile number that you will require to complete the ITR verification process.

Verifying your ITR using the Net Banking option

Another viable option for ITR verification is through the Net Banking route. To begin this process, select the “Net Banking” option on the E-Verify page. You will be redirected to your bank’s website. Here, you have to click on the “Log-in to E-filing” option and you will again be redirected to the E-Verifying page on your Income Tax portal. Next, click on the “E-verify” option to complete the ITR verification proceedings using the Net Banking option.

Verifying your ITR using the Demat Account option

ITR verification can also be done using the Demat Account option. Under this process, you are simply required to select the “Demat Account ” option for e-verification page after your successful login on the Income tax portal. Next, click on the “Continue” option and enter the EVC that you have received on your mobile and the email id registered with your Demat Account. After you have furnished both the OTPs, the ITR verification process will be successfully completed.

How Can SetIndiaBiz Help?

At SetIndiaBiz, we carry out all the legal and tax formalities related to businesses registered in India. This includes the timely filing of error-free income tax returns and their verification in the manner prescribed by the Income Tax Department. Our services are 100% online, saving the time and cost of taxpayers. and reducing the chances of hindrances like incorrect or late filings. Our services are carried out by a team of highly qualified professionals, with an experience of more than 18 years in the field. Click here to get more details on our services related to ITR filing and verification for taxpayers in India.

About Setindiabiz

Setindiabiz is an organized team of experienced CA, CS, & Lawyers, duly supported by a pool of trained accountants & paralegal staff that provides quality & affordable compliance services to startups & small businesses in India. The views, statements and recommendations expressed in this article or post are only for the sole objective of providing information, and it does not constitute professional advice or recommendation of the company. Neither the author nor the company or its affiliates accepts any liability for any loss or damage arising from any information in this article or any actions taken in reliance thereon.

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