Harnessing Information Technology: CBDT’s e-Verification Scheme for Voluntary Compliance

The Income Tax Department has taken a significant stride in promoting voluntary tax compliance and facilitating a transparent and non-intrusive tax administration through its e-Verification Scheme, 2021. The Scheme utilizes information technology to share and verify financial transaction information with taxpayers that may have been unreported or under-reported in their Income Tax Returns (ITRs).

Collecting information from multiple sources, the Department provides taxpayers with their entire financial transaction information through the Annual Information Statement (AIS), giving them the opportunity to object to any misreported information. The Scheme also enables taxpayers to explain their financial transactions with evidence, correct data, and prevent the initiation of proceedings on misreported information.

How it Works

The e-Verification process is entirely digital, with notices and responses submitted electronically. On completion of the enquiry, a verification report is prepared electronically without any physical interface with the taxpayer.

The Scheme is particularly beneficial to taxpayers since it makes them aware of any risks and provides an opportunity to update their ITRs under section 139(8A) of the Income-tax Act, 1961.

The Pilot Study

On a pilot basis, information of financial transactions pertaining to FY 2019-20 was taken up for e-Verification in around 68,000 cases. Details of the transactions were initially shared with the individual taxpayer through an e-campaign. The e-Verification process has been completed by the designated Directorate in approximately 35,000 cases, with the remaining under verification.

As a result of the Scheme's opportunity to accept mismatches of information, many taxpayers have filed Updated ITRs.


The e-Verification Scheme, 2021, is a major initiative of the Income Tax Department, encouraging voluntary tax compliance and facilitating transparent and non-intrusive tax administration. By harnessing information technology, the Scheme provides taxpayers with a comprehensive understanding of their financial transaction information and an opportunity to correct/update income. Further, since the entire process of e-Verification is digital, it eliminates the need for any physical interface with the taxpayer. To know more about the Scheme and the various processes involved, visit the FAQs section on www.incometaxindia.gov.