Global Employer Services News

India - Income tax return verification process must be completed within 30-day period

India’s tax authorities on 31 March 2024 issued a new notification confirming that taxpayers have a 30-day period to complete the income tax return verification process.
The income tax return (ITR) verification is part of India’s tax return filing process. It is the taxpayer’s last step to complete the ITR filing, and enables the tax authorities to take up the ITR for further processing.

While ITR filing is done electronically, the ITR verification can be completed electronically or manually by any of these methods:
  • E-verification
    • One-time password (OTP) generated on taxpayer’s mobile number registered with the Unique Identification Authority of India (UIDAI) on Aadhaar Card linked with the Permanent Account Number (PAN)
    • Electronic verification code (EVC) generated through an online pre-validated bank account, demat account, net banking, or through an automated teller machine
    • Digital signature certificate (DSC)
  • Manual verification
    • Mailing the signed Form ITR-V to the tax authorities’ Centralised Processing Centre
The verification process could pose some practical challenges, for example if the taxpayer does not have an active bank account in India, or Aadhaar/DSC, etc. This issue could be particularly problematic for globally mobile employees and foreign expats who are no longer in India but have a tax filing requirement in India.
Timelines notified for completion of verification
The timeline for verification completion was 120 days from the date of ITR filing; however, on 29 July 2022, the Central Board of Direct Taxes announced that it would drastically reduce the time period to 30 days effective 1 August 2022.

The tax authorities have now issued Notification No. 2/2024, dated 31 March 2024, reiterating the 30-day time limit for such verification.
Effect of reduced timelines
If the ITR verification is completed within 30 days from the date of ITR uploading, the date of ITR uploading will be considered as the date of furnishing/filing the ITR.

However, when the ITR verification occurs beyond the 30-day period, the date of the ITR verification will be treated as the date of furnishing/filing of the ITR.

Below is an example of the effect of the reduced time limit for ITR verification.
Date of ITR uploading Date of ITR verification Date considered for furnishing/ filing ITR
5 July 2024 10 July 2024 5 July 2024
5 July 2024 10 August 2024 10 August 2024
BDO Insights
The Indian tax authorities have provided multiple methods for ITR verification. Taxpayers should choose the most suitable method to comply with the process.

Delayed compliance with ITR verification could result in the ITR being filed after the specified time limits and thereby could result in late filing interest, penalties, or other consequences. Further, any case of non-compliance (i.e., if the ITR verification is not completed) would mean that the ITR is not filed and may have related consequences. Hence, timely and appropriate completion of the ITR verification process is recommended for the taxpayers.

Deepashree Shetty
BDO in India
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