New Form 26AS to serve as a ready reckoner for taxpayers while filing ITR – Check details

This new form will help the taxpayer in filing his returns by reminding all high-value financial transactions at one place, resulting in lessor errors/omissions while filing income tax returns.

In a bid to keep a tab on illegitimate high-value transactions, bring accountability in tax administration, and help taxpayers — particularly honest taxpayers — with updated financial transactions while filing their income tax returns (ITRs), the government has introduced the New Form 26AS. This new form will now carry some additional details on taxpayers’ financial transactions as specified in the Statement of Financial Transactions (SFTs) in various categories and will help taxpayers e-file their ITRs quickly and correctly.

The earlier Form 26AS used to give information regarding TDS (tax deducted at source) and TCS (tax collected at source) relating to a PAN, besides certain additional information, including details of other taxes paid, refunds and TDS defaults. But now, it will have SFTs to help the taxpayers recall all their major financial transactions so that they have a ready reckoner to enable them while filing the ITR.

Kapil Rana, Founder & Chairman, HostBooks Ltd, says, “The Government of India has been continuously working towards a digital and transparent economy and the introduction of the New Form 26AS is another feather in the cap. New Form 26AS will additionally contain details of high-value financial transactions likes cash deposit/withdrawal from saving bank accounts, sale/purchase of immovable property, time deposits, credit card payments, purchase of shares, debentures, foreign currency, mutual funds, buyback of shares, cash payment for goods and services etc. specified under the Statement of Financial Transactions (SFTs).”

The impact will be severe on the illegitimate high-value transactions and people now onwards will execute high transactions with utmost care and precautions. They will have to maintain all related reasons, evidence, circumstances and have to disclose the same in their income tax return. The new form will help make the high-value transaction space transparent, eliminate all unnecessary ambiguous transactions and bring accountability in tax administration.

The introduction of new Form 26AS is also a stepping stone towards the new digital faceless tax administration by adding more reliance into the process and this will abstain those taxpayers who inadvertently conceal financial transactions in their returns. “This new form will help the taxpayer in filing his returns by reminding all high-value financial transactions at one place, resulting in lessor errors/omissions while filing income tax returns. Moreover, it will prevent fraudulent, unlawful transactions and bring greater transparency in the recording of financial transactions,” says Rana.

“It was, in fact, indicated in the Budget 2020 that the Finance Minister seeks to provide the tax payers additional information that is now available with the tax Authorities due to advancement in technology and capacity enhancement. Provision of this information to the tax payer will facilitate compliance,” says Aarti Raote, Partner, Deloitte India.

The New Form 26AS provides the information available with the tax authorities as follows:

It may be noted that information relating to specified financial transaction like sale/purchase of property, investments, pending proceedings and demands and pending and completed proceedings which were not regularly provided earlier would now be uploaded within 3 months from the end of the month in which information has been received. Further, it is also intended that details received under Agreements for Exchange of Information with other countries may also be provided to the extent it is deemed fit.

The New Form 26AS provides an individual with additional information such as details of specific financial transactions, information relating to the proceedings, demands etc. with the tax authorities. This additional information would definitely help the assesses to get an overview of his financial status and will promote compliance.

However, “while the new Form 26AS provides a bird’s eye view of the information to the assesses, this cannot be construed as the statement which provides complete information of assesse as there are other incomes such as savings bank interest income, dividend income or other personal income on which the taxes may not be deducted and it would not form part of Form 26AS,” informs Raote.