The income tax department has identified around 68,000 cases for e-verification due to underreporting of income in tax returns in comparison with the Annual Information Statement for the fiscal year 2019-20, according to sources. The e-verification process involves notifying taxpayers about the mismatch in the Annual Information Statement (AIS) of their financial transactions and the Income Tax Returns filed.
About 56% of the cases or 35,000 cases have already been resolved satisfactorily by the taxpayers by either filing an updated tax return or replying to the notice.
The remaining 33,000 cases have not yet received any response. Taxpayers have until March 31, 2023, to file updated tax returns for income earned in the 2019-20 fiscal year.
Taxpayers can respond to the tax department with explanations for the discrepancies or file updated tax returns if they believe the mismatch flagged in the e-verification notice is correct. The e-verification scheme is an automated, non-intrusive process that encourages voluntary compliance and can help reduce litigation.
When the income tax department informs a taxpayer electronically about their case being picked up for e-verification, they are allowed 15 days to respond. The CBDT aims to complete each e-verification case within 90 days, but more complex cases may take longer. The e-verification scheme was introduced on December 13, 2021, and the pilot program was launched in September 2022. Taxpayers have until March 31, 2023, to file updated returns for the 2019-20 fiscal year.
The Central Board of Direct Taxes (CBDT) Chief Nitin Gupta also advised taxpayers to regularly check their AIS and report any mismatches to the income tax department.
“The FAQs on the e-Verification Scheme, 2021 aim to provide general guidance in understanding the procedures and processes of the e-Verification Scheme, 2021 issued vide Notification no. 137/2021 dated 13.12.2021. These are presented in an easy-to-understand manner without using the technical wordings of the Income Tax Act, to the extent possible” , the document stated.
“These FAQs are informative and advisory in nature and are subject to updates as required. These should not be used as a basis for any legal interpretation of the e-Verification Scheme, 2021 or the Income Tax Act, 1961. The taxpayers may like to take an informed decision on their tax matters in this regard”, it was further disclaimed in the notes section of the FAQ.