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With the Central Board of Direct Taxes (CBDT) announcing that the physical copy of income tax returns filed online will no longer have to be sent for verification for Aadhaar card holders, it will be a great relief for taxpayers who want to use this option.
A new Aadhaar-based electronic verification code will be given to such taxpayers to authenticate their transaction. The electronic verification code consists of a string of characters in the form of a locator number that gives a unique identifier to electronic documents.
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. Aadhaar is a 12-digit individual identification number issued by the Unique Identification Authority of India (UIDAI).
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.
The new process will do away with the need for sending physical copies for verification to the Centralised Processing Centre (CPC), Bengaluru. As of now, the copy of ITR-V, an acknowledgment slip generated on filing the income tax return online, has to be sent either by regular Indian postal service/ordinary post or speed post. Copies sent through courier are not accepted. The ITR-V has to reach CPC within 120 days of filing the return. It generally takes about three weeks to get acknowledgment of ITR-V receipt from CPC from the date of posting.
“There is always a possibility of non-receipt of ITR-V at CPC or acknowledgment of receipt getting delayed, in which case the copy has to be sent again,” said Kuldip Kumar, partner and leader - personal tax, PwC India, adding that the new system will do away with the need for tracking and resending forms for verification.
The new system will also do away with the need to digitally sign the ITR-V form. Creating digital signatures can cost up to Rs 1,500. “The cost for digital signatures can be prohibitive for small tax payers,” said Divakar Vijayasarthy, co-founder, MeetUrPro. According to Kumar, it would have probably been better if the government had linked the verification code to the PAN instead of Aadhaar, because all investment records are backed by PAN. Last month, the Supreme Court had asked the Centre and the states to stick to its earlier order that no person should be denied any benefits or made to suffer for not having Aadhaar.
“The said motive for enabling an Aadhaar card verification is to do away with the need for digital signatures or sending physical copies for verification. The real motive, however, seems to be to track the tax payers' income to the subsidy they avail,” said Vijayasarthy.
The flip side of the new system, according to Vijayasarthy, is that it will now be technically possible for anyone who has your Aadhaar and PAN card number to file returns without your knowledge. The PAN serves as the user ID for tax payers.
Tax-payers should remember that the new system is just an alternative to the existing system. This means, those e-filing returns can continue to send their ITR-V forms in physical form to the Bengaluru centre or use digital signatures. Those who do not have an Aadhaar card will also have to use the existing system. The due date for filing tax returns, either physical or online, is July 31. Individuals earning an income of Rs 10 lakh a year have to compulsorily e-file their returns.
A new Aadhaar-based electronic verification code will be given to such taxpayers to authenticate their transaction. The electronic verification code consists of a string of characters in the form of a locator number that gives a unique identifier to electronic documents.
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. Aadhaar is a 12-digit individual identification number issued by the Unique Identification Authority of India (UIDAI).
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.
The new process will do away with the need for sending physical copies for verification to the Centralised Processing Centre (CPC), Bengaluru. As of now, the copy of ITR-V, an acknowledgment slip generated on filing the income tax return online, has to be sent either by regular Indian postal service/ordinary post or speed post. Copies sent through courier are not accepted. The ITR-V has to reach CPC within 120 days of filing the return. It generally takes about three weeks to get acknowledgment of ITR-V receipt from CPC from the date of posting.
“There is always a possibility of non-receipt of ITR-V at CPC or acknowledgment of receipt getting delayed, in which case the copy has to be sent again,” said Kuldip Kumar, partner and leader - personal tax, PwC India, adding that the new system will do away with the need for tracking and resending forms for verification.
The new system will also do away with the need to digitally sign the ITR-V form. Creating digital signatures can cost up to Rs 1,500. “The cost for digital signatures can be prohibitive for small tax payers,” said Divakar Vijayasarthy, co-founder, MeetUrPro. According to Kumar, it would have probably been better if the government had linked the verification code to the PAN instead of Aadhaar, because all investment records are backed by PAN. Last month, the Supreme Court had asked the Centre and the states to stick to its earlier order that no person should be denied any benefits or made to suffer for not having Aadhaar.
“The said motive for enabling an Aadhaar card verification is to do away with the need for digital signatures or sending physical copies for verification. The real motive, however, seems to be to track the tax payers' income to the subsidy they avail,” said Vijayasarthy.
The flip side of the new system, according to Vijayasarthy, is that it will now be technically possible for anyone who has your Aadhaar and PAN card number to file returns without your knowledge. The PAN serves as the user ID for tax payers.
Tax-payers should remember that the new system is just an alternative to the existing system. This means, those e-filing returns can continue to send their ITR-V forms in physical form to the Bengaluru centre or use digital signatures. Those who do not have an Aadhaar card will also have to use the existing system. The due date for filing tax returns, either physical or online, is July 31. Individuals earning an income of Rs 10 lakh a year have to compulsorily e-file their returns.
