Thursday, March 2, 2017

Steps to be followed after uploading of Income Tax Returns & problems in Verification of ITRs

Nowadays people use technology and send their documents to Chartered Accountants or consultants to file their Income Tax Returns. Companies sometimes also arrange for a virtual office or agent for filing of ITRs. These accountants then file the tax returns electronically for the assessees, however, the work is not over with simply filing the returns. There are certain steps to be followed after uploading the ITRs online which can be summarized as follows:
1.       Obtaining receipt of an acknowledgment of filing of ITR in Form ITR-V.
ITR-V is a one page document pdf file which is generated as an acknowledgement email from the Income Tax Department when you file your ITR without using a Digital Signature Certificate (DSC).

2.       Verification of the ITR-V.
This can be done in the following two ways:
i.                     By sending the ITR-V to CPC Bangalore.
ii.                   By opting for e-verification in cases when the ITR has not been filed with DSC (Digital Signature Certificate).
Further, the following methods can be used for e-verification of ITRs:
·         Through generation of Electronic Verification Code (EVC) on registered mobile number and email of the assessee.
·         Through EVC via Bank Account, Demat Account and AT
·         Through OTP sent on mobile number mentioned on the Aadhar card of the assessee.
·         Through Net Banking log in.

3.       Wait for intimation from Income Tax Department under section 143(1).
Once your income tax return is processed, an email is sent to the tax payer to intimate them about any tax or interest payable/refundable and can be treated as completion of assessment. It is also sent via Post before the expiry of one year from the end of the assessment year in which the income was assessable. If there is no difference between the income tax computed as per ITR and as computed u/s 143(1), then this notice will serve as final assessment of the return, otherwise it serves as a notice of demand or intimation of refund.

A number of problems are faced by the people during the verification process as a result of which the returns are just uploaded but not accepted. Some of the issues are mentioned as under:
1.       Verification Method – Dispatching ITR-V to CPC Bangalore:

This is one of the most commonly used methods of verification.
The address of CPC is given on Verification form along with clear instructions that the verification form should be sent to CPC either through Ordinary Post or Speed Post.
·         Sending through Ordinary post generally takes multiple attempts until the post is shown as accepted and is also difficult to keep track of whether the same has been received or not, especially by elderly people.
·         Sending through Speed post on the other hand proves to be a more costly alternative and more over number of ITR –V sent and accepted differ and rejected one are not intimated timely.
·         Moreover, there is no way to prove that the Tax Payer has already sent the ITR as there is no PAN reference.

2.       Verification Method – E-Verification

·         E-verification by using an EVC has to be done within 72 hours of generating the code after which the code expires. The code is sent to the email address and phone number entered for filing the return and assessees who are not tech-savvy such as the elderly face problems in such a case. Also, this method can only be used if the total income of the assessee as per ITR is less than Rs. 5 lacs and there is no refund claim.
·         The upper limit on a phone number or a single email address usage is 10 assessees only and so accountants filing these returns face problems in case their clients do not use emailing services.
·         If the message regarding non receipt of such verification form is then sent on such email and phone number, they fail to get noticed by people who are not active tech-users such as the elderly or the uneducated.
·         If the verification is done through Aadhar based OTP, as it is commonly done, the same issues present themselves, especially if the phone number of the assessee is no longer the one mentioned on their Aadhar Card or no phone number mentioned on aadhar card.
·         EVC generated through Bank Account/Demat Account/ATM/Net Banking is not preferred by the tax payers since they require personal information to be shared online which exposes them to high risks online.
It is for the assessee to take following steps in time:
ü  Either E verify with Linked Aadhar
-          No discrepancy in Aadhar and PAN
-          Mobile mentioned on Aadhar
ü  Send speed post of ITR –V to CPC timely and see the message of receipt/ Non receipt on their mobile from ITD.
ü  Check the status of ITR receipt on Income Tax site on the link

Contributed by : Kashika Ahuja