Posted on by Nikita Bhatia

Electronic Verification to ease Return Filing for Taxpayers

With an attempt to make e-filing completely paperless, the Central Board of Direct Taxes (CBDT) has come out with the technology of e-verification of assesses by means of their Aadhaar number.

This will relax the requirement of sending physical copies of the return acknowledgment for verification to the Centralised Processing Centre (CPC), Bengaluru and will also do away with the need to digitally sign the return. However, this new system is just an alternative to the existing system. This means, those e-filing returns can continue to send their acknowledgements (ITR-V forms) in physical form to the Bengaluru centre within 120 days of filing the return or use digital signatures. Also, those who do not have an Aadhaar card will also have to use the existing system.

What is EVC and How does it work?

The Electronic Verification Code (EVC) consists of a string of characters in the form of a locator number that gives a unique identifier to electronic documents.

The income tax department intends to link the Income Tax Return submitted by a person to his Aadhaar number by generation of an Electronic Verification Code so that authentication of the return takes place automatically and electronically. Hence, an Aadhaar-based electronic verification code will be given to such taxpayers to authenticate their transaction.

A new row has been provided in the Income Tax Return (ITR) forms for assessment year 2015-16 to enable someone filing e-returns to provide his Aadhaar card number. Once the card number is punched in, the tax-payer will get a one-time password, or OTP, number on his or her mobile phone for verification. This verification number, then, has to be entered on the relevant ITR form to complete the process of e-filing. Visit https://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF/e-Verification_User_Manual.pdf to get detailed guidelines on how to generate EVC.

Applicability of EVC

As per the Notification dated 15th April, 2015 issued by CBDT, it has been clarified that the Return of Income shall be furnished in the following manner:

Person Condition Manner of furnishing Return
          Individual or HUF   Accounts are required to be audited under section 44AB of the Act, ie Tax Audit applicable   Electronically under digital signature only
    In all other cases, where Tax Audit not applicable • Electronically under Digital Signature, or • Electronically under EVC, or • Electronically and thereafter submitting the verification of the return in Form ITR-V.
Company In all cases Electronically under digital signature only
    Firm or LLP or any other Association of Persons (AOP) or Co-operative Society   Accounts are required to be audited under section 44AB of the Act, ie Tax Audit applicable   Electronically under digital signature only
    In all other cases, where Tax Audit not applicable • Electronically under Digital Signature, or • Electronically under EVC, or • Electronically and thereafter submitting the verification of the return in Form ITR-V.
Political Parties     In all cases • Electronically under Digital Signature, or • Electronically under EVC, or • Electronically and thereafter submitting the verification of the return in Form ITR-V.
  Charitable Trust, Section 25 Company     In all cases • Electronically under Digital Signature, or • Electronically under EVC, or • Electronically and thereafter submitting the verification of the return in Form ITR-V.

Advantages of e-filing of Income Tax Returns under the EVC mechanism:

  • Online filing of tax returns becomes truly paperless as the EVC mechanism will do away with the need for sending physical copies for verification to the Centralised Processing Centre (CPC), Bengaluru.
  • Possibility of non-receipt or delay in receipt of the acknowledgement (ITR-V) at CPC shall now be completely evaded.
  • For sending the ITR-V, it had to be signed and printed properly so that the bar code was clearly visible. ITR-Vs that did not confirm to these specifications got rejected. The EVC mechanism will solve this problem.
  • Taxpayers will be relieved from the cost of making Digital Signatures.

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Nikita Bhatia
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