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All you wanted to know about new Form 26AS

Keerthi Sanagasetti | Updated on July 20, 2020 Published on July 20, 2020

The arms of the taxman are long, but he is constantly trying to extend his reach so that ill-gotten wealth is not stowed away in hidden nooks and corners. It is with this intent that the Income Tax Department has launched the new Form 26AS, making numerous tweaks to the existing one. According to the Revenue, “the new Form 26AS, is the faceless hand-holding of the taxpayers to e-file their income tax returns (ITR) quickly and correctly.” But it is actually much more than that.

What is it?

Form 26AS essentially is an annual consolidated statement that reflects the tax deducted or collected at source, against one Permanent Account Number (PAN). The form, which can be downloaded from the IT department website, includes information collected from various sources. Aside from information on taxes paid by you (advance tax instalments) or on your behalf (TDS or TCS), the form has all details of the transaction — the type and amount of income, the tax deducted and paid to the exchequer and information about the source of income. That apart, the form also has other information including details of other taxes paid, refunds and TDS defaults.

In May, the CBDT notified a new Form 26AS, which became effective from June 1, 2020. The new form asks for host of details of specified high-value transactions entered into by the taxpayer. These include payments worth ₹10 lakh or more in a financial year (FY), for one or more credit cards of a single account holder. Investments in bonds or debentures or shares, issued by a company, exceeding the said monetary limit in any FY, must also be reported in the new form. Similarly, if investments in any mutual fund house exceed ₹10 lakh in a year, it will now reflect in your Form 26AS. Other specified transactions include, purchase or sale of immovable property, where the transaction value or valuation for the purposes of stamp duty is ₹30 lakh or more; and expenses in foreign currency through cards, cheques or any other instrument, worth ₹10 lakh or more in any FY .

Why is it important?

For taxpayers, Form 26AS serves as a reference to file ITRs. When you file your return, your income and tax payment details in your return should be in line with this statement.

The new form also includes other details such as name of the institution (or person) filing details pertaining to the above-mentioned transactions with the IT department, date of transaction, number of parties involved in the transaction, mode of payment, etc. This information will be of immense use to the taxman to cross-verify suspicious transactions.

That apart, the new notified form shall also have details with respect to demands raised by the department and other tax proceedings involving the assessee, compiled at one place. Currently, the details relating to these demands raised by the department are available (on the income-tax website) only when you have to respond to a demand notice. This can also serve as a red flag for the tax officials.

Why should I care?

The department has been collecting information on high-value transactions from banks and other financial entities for long. These include details on bank transactions, sale or purchase of immovable property, foreign currency, cash payment for goods and services, etc.

Now, all such information will be uploaded in the new Form 26AS within three months from the end of the month it is in possession of the Principal Director General Income Tax (System), or any person authorised by him. With such timely availability of all this information, the new Form 26AS can help remind about all major financial transactions while filing the ITR, thereby, preventing any inadvertent concealment of income in the ITR.

The bottomline

Make the new Form 26AS your ready reckoner while filing your ITR.

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Published on July 20, 2020
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