Every Indian citizen whose income falls under the taxable bracket is liable to pay taxes as per the tax rates set by the Income Tax department. As part of the income tax payment process, one has to file income tax returns. While filing income tax returns, one must verify the filed returns for it to be considered as completely filed. Until a few years ago, the income tax return verification process was very tedious and required verification (ITR-V) to be done via post sent to the Central Processing Centre (CPC), Bengaluru. Due to digitization, the verification process has now become very convenient and hassle-free.
The Income Tax department has now introduced digital/electronic modes of verification. Thus, a taxpayer can now make use of such platforms for electronic verification (e-verification) of returns. Here, we will explain the concept of ITR verification and provide details on how one can verify IT returns using a Demat account.
What is verification of income tax return?
After uploading ITR on the Income tax department’s e-filing website, a taxpayer is given 120 days by the IT department to verify the ITR. If this step is not completed within the given period, the tax filing is considered invalid as per the IT laws.
ITR verification process can be carried out online as well as offline. However, there is only one offline verification option, and it requires a taxpayer to send a post with a copy of the ITR verification. This process can be time-consuming and involve hassles. Thus, the ideal mode to get the verification done quickly and hassle-free is by using the online route.
E-verification of IT returns can be done through the below-mentioned modes:
- Demat account
- Net banking
- ATM card
- Bank Account
IT return verification using Demat account
To e-verify IT return online using a Demat account, here are the steps that one can follow:
- The first step is to register as a user on the Income Tax department website – https://incometaxindiaefiling.gov.in/ – by opening an account.
- At the time of registration, a user’s Permanent Account Number (PAN) is the user ID, and one can select a password as per personal preference. After an account is created, the user can log in to the portal.
- A user must then go to the account options and select ‘view returns’.
- Different sub-heads such as ITR/Form from previous financial years, PAN, filing type, acknowledgement number, return status and pending e-verification of returns will appear. From these, a user must select ‘e-verify’ option.
- An option to generate Electronic Verification Code (EVC) using a Demat account can be seen here.
- After selecting this option, one must pre validate his/her Demat account.
- Select the depository type as either National Securities Depositories Ltd (NSDL) or Central Securities Depositories Ltd (CSDL). Depending on selection, the portal will ask the user to provide details such as Demat account number, Depository Participant’s (DPs) ID, client’s ID, phone number, email address, etc.
- Next step is to select ‘pre validate’ option.
- One can then generate EVC through a verified mobile number.
- Upon confirmation, a user will receive an EVC on the entered phone number.
- EVC or Electronic Verification Number is a 10-digit code that can be entered at any time up to 72 hours from generation. This number is unique to an individual’s PAN and can be generated only once. For any modifications, a user has to start the e-verification again and generate a fresh EVC.
- A user will receive an acknowledgement as the last step. This confirms that the return has been e-verified. Upon successful e-verification of returns, one also gets notified via Demat account through email.
What are the advantages of verifying IT returns using Demat account?
Using a demat account to e-verify ITR returns has many advantages. Listed here are some of them:
- Safe mode:
ITR e-verification using a Demat account ensures maximum safety and confidentiality of information. This digital option comes with multiple safety levels that help in mitigating risk of the ITR information being leaked or lost.
- Easy and convenient:
Verifying IT returns using a Demat account is an easy process, since it is paperless and can be completed within a few minutes. It takes away the lengthy paperwork and processes such as download, sign and sending a physical copy of ITR by post.
- Quick processing:
The offline process of physically sending ITR return verification to be processed by the Income Tax department used to take several days. In comparison, e-verification using a Demat account can be done quickly. Income tax refunds, if any, also get transferred easily to the assesse’s account within a few days.
For those who have not tried yet, ITR return filing using a Demat account may seem to be a complicated process. However, if anything, it is a very simplified process that significantly reduces the time and efforts of an income taxpayer. Therefore, taxpayers must make the most of this tool to seamlessly file their IT returns conveniently and on time.
To open a Demat account easily, you can download the Fisdom app on your smartphone. This app allows a seamless online KYC process for Demat and trading account opening.
You can voluntarily file ITR even if your income is below taxable limits. Apart from acting as a proof of tax compliance, the ITR can later be used as a document in various instances, such as loan applications.
ITR filing does not require any documentation. However, one must retain a copy of ITR and verification for future references.
Yes, to get IT refund, it is mandatory to e-verify ITR. Also, the e-verification must be done within the stipulated timelines to get a refund. Failure to adhere to timelines results in the ITR being considered invalid.
For individuals and HUFs, filing of ITR is mandatory if their income is above the basic tax exemption limit of Rs. 2.5 lakhs. For senior citizens, this limit is Rs. 3 lakhs and for super senior citizens, it is Rs. 5 lakhs.