The Central Board of Direct Taxes (CBDT) has notified regarding revision in Form 26AS on 28.05.2020. Form 26AS is an annual consolidated tax statement containing details of taxes paid on behalf of the person by his deductor. It also contains details of tax which is deducted at source and the details of advance tax along with which refunds and high-value transactions are deducted on behalf of the taxpayer.
The revamped form shall be in effect from June 1, 2020. With this, form 26AS has now been revamped to an “Annual Information Statement” which apart from the TDS/TCS details, shall now contain comprehensive relating specified financial transactions, payment of taxes, demand/refund and pending/completed proceedings undertaken by a taxpayer in a particular financial year that has to be mentioned in the income tax returns. To implement this, the budget 2020-21 had introduced a new section 285BB in the income-tax act.
Earlier, this month FM Nirmala Sitharaman in her Budget 2020 proposed to introduce a new section 285BB which will require providing a comprehensive annual information statement for all the financial transactions done by a taxpayer to the tax department in a particular financial year that needs to be mentioned in the ITR.
1. What is Form 26 AS?
Form 26AS is a tax credit statement against a PAN. It contains details of the tax deducted on income by the deductor, details of tax collected by collectors, advance tax paid by the taxpayer, self-assessment tax payments, regular self-assessment tax paid by the taxpayer. The Form 26AS can be downloaded from the TRACES website or through net banking facility of authorized banks.
Form 26AS provides for the following details-
1. Details of Annual Information Report transactions.
2. A tax collected by the tax collectors on behalf of the taxpayers.
3. Tax deducted by the deductor on behalf of the taxpayer.
4. Advance-tax, self- assessment tax, and regular assessment tax deposited by Pan/taxpayers.
5. Details of the tax deducted by the tax deductor.
6. Details of the refund received by the taxpayer during the year.
7. Details of the High-value Transactions in respect of the shares, mutual funds, etc.
Assesses need to check their Form 26AS regularly in order to get assured that their employer has deposited the tax deducted against your PAN. Before filling the ITR, taxpayers need to ensure that the TDS details mentioned in Form 16 & Form 26AS match otherwise it will to defective filing of ITR.
2. What are the proposed changes in Form 26AS?
The Form 26AS has been revamped to an “Annual Information Statement” which shall ask apart from the TDS/TCS details also ask for the comprehensive information about specified financial transactions, payment of taxes, demand/refund and pending/completed proceedings undertaken by a taxpayer in a particular financial year which are to be given away in the prescribed ITRs.
Also, a new section has been introduced namely in Income Tax Act 285BB, which will be effective from June 1, 2020. This form can be accessed from the income tax website by the taxpayers using their PAN number.
3. What shall be the benefits of the proposed changes in the form 26AS?
a. Now, the changes will include financial information such as sale or purchase of immovable property and shares in possession of the Income-tax authority. Consequently, section 203AA of the Income Tax Act 1961 will be deleted.
b. From June 1, mutual fund houses, depositories, and banks will have to provide details of transactions done against PAN in a financial year.
c. With all information in one place, tax authorities will have ease of doing e-business. Such changes will assist the taxpayers to identify and take corrective action, in case any incorrect information is reported in Form 26AS.
d. It will also assist tax authorities doing e-assessment and having no/limited interaction with taxpayers as tax authorities will be able to easily compare the information available in Form 26 AS vis-à-vis information reported by taxpayers in ITR and any mismatch may be easily flagged by the systems to tax authorities.
e. It will also assist the taxpayers to identify and take corrective action, in case any incorrect detail is reported in Form 26AS.
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