E-Return Intermediary (ERI) Income Tax: A Detailed Overview

Farheen Mukadam
Jul 10
7 min read

Updated: Aug 13

Over the past few decades, return filing has gradually changed from filing paper-based returns to this digital era. E-return intermediaries have emerged as a result of the substantial changes in filing and the complexity of tax rules brought about by the advent of technology. E-Return Intermediaries are those approved individuals who assist taxpayers in correctly submitting their income tax returns. The complexity of tax compliance is made simpler by an e-return intermediary. It guarantees that taxpayers may move through the procedure quickly and easily. In this article, we will explain the concept of an e-return intermediary, its advantages and requirements, the registration process, duties and responsibilities, and other details.

Who is an E-Return Intermediary?

Eligibility Criteria for an E-Return Intermediary

E-Return Intermediary Benefits

Roles and Responsibilities of an E-Return Intermediary

Prerequisites of E-Return Intermediaries

E-Return Intermediary Registration

Steps to Become an E-Return Intermediary

Steps for an E-Return Intermediary Registration

Conclusion

Frequently Asked Questions

Who is an E-Return Intermediary?

Certified professionals with the authority to file income tax returns on behalf of taxpayers are known as e-return intermediaries. The taxpayers have the option of online filing their income tax forms or via a liaison or middleman. These representatives are chosen by the Income Tax Department to submit income tax returns on behalf of taxpayers. There are requirements that must be met in order to be eligible to act as an e-return intermediary. If they meet the qualifying requirements outlined in the ITR, anyone who wants to work as an ERI in the income tax department must register online with the NSDL.

Eligibility Criteria for an E-Return Intermediary

The following requirements must be met by the entities in order for them to be eligible to become an e-return intermediary:

An advocate, a business secretary, a public sector entity, or a chartered accountant
A business registered in India with a net worth above Rs. 1 crore
An association of certified public accountants
A group of advocates
A corporation secretarial firm
A person who is permitted to prepare tax returns
A cost accountant and a drawing officer for a government agency
A cost accounting firm

E-Return Intermediary Benefits

If a taxpayer files their taxes electronically through an e-return intermediary, they can receive a number of benefits. The advantages are:

Using an intermediary to file electronically is a quick and easy process.
Assuming the taxpayer filed their taxes using an E-Return Intermediary, they can receive their tax refunds in 1-2 months assuming they match the eligibility requirements.
Every piece of information that a taxpayer submits through an electronic return intermediary is kept private and secure.
The ERI filing process reduces the possibility of mistakes. The ERI system immediately alerts the user to the incorrect data and prompts them to enter the correct information.

Roles and Responsibilities of an E-Return Intermediary

An ERI's primary duties and responsibilities in income tax are as follows:

To find out whether the taxpayer qualifies for the program.
To confirm that the taxpayer's PAN and TAN are authentic.
To confirm that the taxpayer filled out the income tax return form with accurate information.
To confirm that the online ITR is submitted within the allotted period.
To verify the data in the documents supplied with the self-assessment tax details, advance tax, and TDS.
To attest to the taxpayer's ITR verification.
To confirm that the information needed to file an ITR is kept on file for a minimum of one year following the end of the assessment year.
To ensure that the taxpayer gets a copy of the e-return and an acknowledgement of the ITR-V form.
To ensure the privacy of the client's information.
To verify that the registrant is notified of any modifications to the application's data.
To verify that all stated terms, conditions, and regulations are followed by the officials employed by the ERI intermediary.

Prerequisites of E-Return Intermediaries

The following requirements must be met by the entity in order to apply and be added to the e-Return intermediary list:

Digital Signature Certificate

An NSDL-certified certifying authority-issued Class II or III Digital Signature Certificate is the first requirement. Both the filed application and the uploaded online returns must be digitally authorized and signed. The certificate must include the applicant's name. If the certificate is granted in the name of an employee or partner, the applicant needs to provide an authorized letter.

Hardware Requirements

A CPU operating at more than 500 MHz
At least 256 MB RAM
Dedicated storage space of minimum of 20 GB on the hard drive
A monitor with an 800 x 600-pixel screen resolution and a 256 colour display
A DAT drive/CD writer/other device for backup
A printer
A UPS for a minimum of 30 minutes of backup power

Software Requirements

A fast internet connection
Windows 98 or later as the operating system
Dependable anti-virus software
A browser that is more recent than Internet Explorer 6.0
A due diligence certificate from a certified ISA or CISA specialist
Only computer applications approved by the Income Tax Department and steps taken to guarantee data security
No criminal history

E-Return Intermediary Registration

By completing the online registration form, any qualified entity can become a member of the NSDL. It is not possible to submit applications offline. The applicant will be taken to a screen with a distinct 15-digit acknowledgement number if the application is accepted for registration. The acknowledgement receipt must be downloaded, saved, and printed by the entity for their records. The acknowledgement must be signed by the entity. The NSDL must receive the signed acknowledgement together with the papers listed below:

Eligibility Certificate
Proof of Due Diligence
PAN or TAN card, according to the entity's disposition
A Rs. 4,000 registration cost.

Steps to Become an E-Return Intermediary

Step 1: Verify the requirements for eligibility. These include having a current and legitimate PAN and not yet being listed as an electronic return intermediary. You must also have the appropriate computer infrastructure.

Step 2: Choose the type of ERI; whether to register as a Type 1, Type 2, or Type 3 ERI. Everybody has different needs when it comes to offline tools and software.

Step 3: Use the official e-filing portal to register online. The entity needs to provide the required paperwork, complete the registration form, and enter their TAN and PAN.

Step 4: Provide documentation; the entity must provide proof of eligibility and a due diligence certificate from a certified CISA or ISA specialist. Additionally, the registration processing cost must be paid.

Step 5: The application will be examined by the authorities. The entity will receive confirmation and be able to start operating as an ERI if it is accepted.

Steps for an E-Return Intermediary Registration

Step 1: Click "Register" on the home page of the e-filing portal.

Step 2: Select "e-Return Intermediary" from the Category selection under the "Others" category.

Step 3: Select "Register as New Applicant" and select an appropriate ERI type. Press the "Continue" button.

Step 4: Click "Validate" after entering your TAN or PAN on the "Register as e-Return Intermediary page" that you want to use to register as an ERI.

Step 5: After verification, a 6-digit OTP will be sent to the registered mobile phone number associated with the specified TAN or PAN. After entering the OTP, click "Continue".

Step 6: Click "Continue" after selecting an appropriate candidate category.

Step 7: Click "Continue" after entering your basic information. (Name, DOB, organization name, DOI for business, and date of TAN allocation for DDO are among the basic details.)

Step 8: The Principal Contact Details page will open following a successful validation. After entering the information, click "Continue."

Step 9: The email address and mobile number will receive a 6-digit OTP. After entering the OTP, select "Continue."

Step 10: Select the Attachments tab, then upload the necessary files based on the application type.

Step 11: Click "Confirm" after making any necessary edits to the information on the Verify Your Details screen.

Step 12: At last, a success notification appears on the screen, and the registration request is sent for approval.

Conclusion

For both individuals and businesses, e-return intermediaries are essential in streamlining the tax return process. Their requirements, duties, and eligibility requirements are all meticulously crafted to guarantee the security and correctness of tax returns. Taxpayers can benefit from time savings, prompt refunds, and the assurance that comes with accurate and private filing by utilizing their experience. E-return intermediaries are crucial friends in the quest for financial compliance and peace of mind as technology continues to change the tax landscape. Hiring a professional is the ideal option if you also need assistance with tax filing in order to guarantee a smooth filing process.

Frequently Asked Questions

What is ERI in income tax?

In income tax, ERI designates approved organizations that act as go-betweens for taxpayers and the Income Tax Department. They have the right to electronically file an ITR and perform additional tasks on behalf of the ERI-eligible person. The "Electronic Furnishing of Return of Income Scheme, 2007" contains provisions that govern the ERI filing process.

What is the e-return intermediary scheme?

The e-return intermediary scheme, which was introduced by the Income Tax Department of India, allows e-return intermediaries to help taxpayers file their ITRs electronically.

What are the benefits of e-return intermediary?

Using an e-return intermediary to file returns online is a simple and time-saving approach. It guarantees the confidentiality and security of taxpayer information. Additionally, the technologies in use quickly highlight filing problems so that the taxpayer can fix them.

Who is eligible for ERI?

An organisation or business in the public sector with a PAN number is one of the eligibility requirements for the e-return intermediary. Any business with a net worth of more than Rs. 1 crore is also included. The business must have a legitimate PAN and be founded and registered in India. ERI is also available to firms with advocates, chartered accountants, or company secretaries who have a current PAN.

What is ERI-type Income Tax?

The Income Tax Department of India has certified ERI-type income tax businesses to electronically file ITRs on taxpayers' behalf. Type 1 entities have a due diligence certificate from a certified ISA/CISA professional and computing infrastructure that has been approved by ITD. Entities with their own software application are classified as Type 2. Entities that create offline utilities fall under Type 3.