Tax Paid but Return Not Verified: Salaried Individuals Risk High Liability

It has been reported that several salaried taxpayers who failed to verify their tax returns within the prescribed time are automatically shifted to the new tax regime, attracting significantly higher liabilities. Since the new regime does not allow deductions, they owe a much larger tax liability.

For example, if the return is not verified through Aadhaar OTP or other approved methods, a taxpayer who paid a self-assessment tax in June 2025 may receive an acknowledgement from the bank that the filing is incomplete. When the individual attempt to file again, the portal will default to the new regime, showing a hefty fee, including late fees.

Tax Return Verification Is Important

Tax experts caution that filing is considered complete only when the return is both submitted and verified. Verification can be done through Aadhaar OTP, net banking, or other prescribed options and must be completed within 30 days of submission. If this step is missed, the law treats the return unfiled, regardless of whether the tax has been paid.
Tax advisor Priti Sirdeshmukh, writing on her blog, noted that many taxpayers mistakenly believe payment alone is sufficient. "In reality, verification is the final and most crucial step. Without it, the return is treated as invalid, no matter how much tax has been paid," she said.

Old vs New Regime

For individuals without an income from business, the law allows an option between the old tax regime and the new tax regime each year. The old regime permits deductions and exemptions, while the new regime offers lower tax rates but fewer deductions.

This choice, however, must be exercised at the time of filing before the due date. If the return is not verified in time, the system defaults to the new regime. In the recent cases, the taxpayers were bound to remain in the new regime because they missed the verification step.

No Remedy Possible After Deadline

Tax professionals point out that there is no provision under the Income-tax Act to switch back to the old regime once the deadline is passed. Even though self-assessment tax was paid, the return is treated as unfiled if it is not verified. The only option left is to file under the new regime and pay the higher liability.

The new development reminds that, along with the payment, it is imperative for a taxpayer to complete mandatory verification steps for not attracting hefty liabilities.