First-time ITR filer? Why experts say you should enable the Income Tax Department's e-Filing Vault

As more taxpayers file income tax returns online, protecting sensitive financial information has become as important as filing the return itself. Tax experts are advising first-time taxpayers to enable the Income Tax Department's e-Filing Vault Higher Security feature, saying it offers an additional layer of protection against unauthorised access and identity misuse.

The feature, available on the Income Tax Department's e-filing portal, is optional but acts as a two-factor authentication (2FA) mechanism that requires an extra verification step when users log in or reset their password. It is designed to protect sensitive information such as Income Tax Returns (ITRs), Annual Information Statements (AIS), Form 26AS and refund details.

What is the e-Filing Vault?

According to CA Aditya Sesh, Founder and Managing Director of Basiz Fund Services, the e-Filing Vault is essentially a security lock for a taxpayer's income tax account.

"The e-Filing Vault is essentially a security lock for your Income Tax e-filing account. Think of it as the tax portal's version of two-factor authentication, the same kind of protection you get with internet banking," Sesh said.

He explained that once activated, the feature strengthens login security through Aadhaar OTP or similar authentication methods, restricts access to sensitive financial information and prevents unauthorised access even if someone else knows the user's login credentials.

"Most people don't realise how much personal financial data sits on that portal. This feature is a straightforward way to make sure only the right person can access it," he added.

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Why first-time taxpayers should enable it

While experienced taxpayers may already be familiar with digital security measures, Sesh believes new taxpayers often overlook account protection.

"First-time taxpayers typically focus on filing their return and overlook account security entirely, which is a gap worth closing from the outset," he said.

According to him, enabling the e-Filing Vault helps protect personal and financial information from unauthorised access, prevents fraudulent logins, safeguards refund details from being altered and reduces the risk of identity theft through the tax portal.

"As tax administration becomes increasingly digital, cybersecurity is no longer separate from compliance; it is part of it. Activating this feature is a simple, one-time step that meaningfully strengthens the security of any income tax account," Sesh said.

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How the feature works

Once the e-Filing Vault is enabled, taxpayers must complete an additional authentication step before accessing their account or resetting their password.

Users can choose from multiple authentication methods, including:

Aadhaar-linked OTP
Net Banking
Digital Signature Certificate (DSC)
Electronic Verification Code (EVC) through a pre-validated bank account
EVC through a pre-validated demat account

The additional verification ensures that even if someone obtains a taxpayer's user ID and password, they cannot access the account without completing the second authentication step.

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Who can use it?

Any registered user of the Income Tax e-filing portal can activate the feature, provided they have a valid login and at least one eligible authentication method, such as Aadhaar OTP, Net Banking, a registered DSC or a pre-validated bank or demat account.

To enable the feature, taxpayers need to log in to the e-filing portal, navigate to 'My Profile' and select 'e-Filing Vault Higher Security'. They can then choose whether to enable additional security for login, password reset or both before selecting their preferred authentication method.

Although enabling the e-Filing Vault is voluntary, tax professionals say it is becoming an important digital safety measure as more taxpayers manage their compliance online and increasingly share login credentials with accountants or tax consultants during the filing season. A one-time activation can significantly reduce the risk of unauthorised access while ensuring that sensitive tax records remain protected behind an additional layer of verification.

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