Once you submit your Income Tax Return (ITR), the last but most important step is e-verification. If you do not verify your ITR, it will be treated as invalid. Out of the several e-verification options available, utilizing a Demat account is one of the fastest and easiest steps.
This blog is a guide to what e-verification is, how you can e-verify your ITR through your Demat account, how you can do it, and things to remember to verify it successfully.
Introduction
Filing an income tax return is not the end of the matter; it needs to be verified within 30 days (previously 120 days) from filing. If you do not verify it, the Income Tax Department considers your return as not filed, which can result in penalties or forfeiture of refunds.
E-verification is a straightforward process that verifies your return electronically without the requirement of sending any hard copies to the Centralized Processing Centre (CPC) in Bengaluru. Conventional alternatives such as Aadhaar OTP, net banking, and bank account EVC were traditionally employed. Yet, the Demat account e-verification alternative has become more popular, particularly among investors who already hold Demat accounts for stock market transactions.
This process is safe, quick, and especially helpful if you have Aadhaar or banking EVC generation problems.
What is e-Verification of ITR?
E-verification is electronically verifying the genuineness of the information provided in your income tax return. The Income Tax Department offers several options to e-verify an ITR, making sure that the taxpayer receives the notice of the filed return.
Without e-verification –
- Your return is not processed.
- Refunds (if any) are not made.
- It can attract non-compliance penalties.
Therefore, confirming your return within the given time period is as crucial as submitting it.
Prerequisites to Use a Demat Account to e-Verify ITR
Prior to initiating the e-verification process, ensure –
- Your Demat account is KYC-compliant and active.
- Your Demat account must be linked with your PAN.
- Your mobile number and the email ID are registered with your Demat service provider.
- Your Demat account is pre-validated on the Income Tax e-filing portal.
In case your Demat account is not pre-validated, you need to validate it prior to that, which takes 1–2 days once the request is made.
Why Use a Demat Account for e-Verification?
The Demat account approach is a quick alternative for individuals who –
- Do not want to use Aadhaar-based verification.
- Have problems with bank account pre-validation.
- Would like a quick, secure option using their investment account credentials.
As Demat accounts are already KYC-verified (connected with PAN and mobile number), utilizing them for ITR verification adds an extra layer of security.
In addition, since numerous people already have Demat accounts for mutual fund investment or stock market trading, this mode is gradually becoming more accepted.
Steps to Process the e-Verify ITR through a Demat Account
Step 1. Login to the Income Tax Portal
Go to https://www.incometax.gov.in and login through your PAN and password.
Step 2. Proceed to the e-Verify Return Section
Once you are logged in, under the “e-File” tab, choose “Income Tax Returns” → “e-Verify Return.”
You will get the list of returns you have submitted. Select the return which is pending for verification.
Step 3. Choose ‘Through Demat Account’ as the Method of Verification
You will be shown several ways to e-verify. Choose the option “Through Demat Account EVC.”
Step 4. Generate Electronic Verification Code (EVC)
An EVC will be generated by the system and sent to your registered mobile number as well as the email ID associated with your Demat account.
Certain websites might take you to authenticate through your Demat DP’s portal (e.g., NSDL, CDSL, or your broker’s webpage such as Zerodha, ICICI Direct, Groww, etc.).
Step 5. Enter the EVC on the Portal
Enter the EVC received in the Income Tax portal when asked to do so. Once successfully validated, a confirmation message is shown indicating that your return has been successfully verified.
You will also get an email and SMS from the Income Tax Department confirming e-verification.
Benefits of Using a Demat Account for ITR Verification
- Quick and hassle-free – Especially when Aadhaar OTP or bank EVC does not work.
- Safe – Operates using KYC-compliant investment accounts already authenticated by the banks.
- No reliance on bank accounts – Handy if your bank is not supported for EVC generation.
- Good failover option – A safe alternative on high-traffic filing days when other channels are delayed.
Common Problems and How to Overcome Them
At times, taxpayers encounter problems during Demat-based verification. Some of the common problems are –
- Mismatch of mobile/email IDs – Update your registered mobile and email with the DP to match the portal data.
- Inactive Demat Account – Only active, fully KYC-compliant accounts can be utilized.
- PAN Not Linked – If PAN is not linked to your Demat account, validation and EVC generation will fail.
- Delayed EVC Delivery – Sometimes, there can be a delay in receiving the EVC; retry or contact your DP if the problem continues.
Maintaining your Demat account details updated with your broker and on the Income Tax portal avoids most problems.
Conclusion
E-verification of your Income Tax Return is an important step that finalizes the process of filing. Utilizing your Demat account to e-verify ITR is a safe, reliable, and growingly popular way, particularly for traders in stocks and investors.
By keeping your Demat account pre-validated and your contact info updated, you can do this verification within a few minutes, independent of Aadhaar or banking. With increasing taxpayers investing in varied assets, getting to know the process of how to use your Demat account for verification is not only beneficial but strategic.
On-time filing of return is essential, but on-time verification guarantees that your compliance has indeed reached fruition.
Related Services
References
