Form 26AS till now has always been an annual consolidated credit statement issued by the income tax to help taxpayers cross-verify income earned, tax deducted at source (TDS) and tax deposited during a given financial year.
In its new avatar, the new “bigger and bolder Form 26AS” would be more of an ‘Annual Information Statement’ which will have comprehensive information on taxes paid, details of pending and completed income tax proceedings, status of income tax demand and refund along with details of specified financial transactions like purchase of shares or property.
Key takeaways of the new Form 26AS released by the CBDT vide Notification dated May 28, 2020 by way of amendment to Section 285BB w.e.f. 01.06.2020:
This form also has a new provision of mobile number, email ID and Aadhaar number of the taxpayer, which can help direct connectivity of the tax department with the taxpayer.
In other words, the new form 26AS will now be a complete profile of the taxpayer for that particular year as against earlier version which had limited information.
Further, an enabling provision has been notified to upload information received from any other officer, an authority under any law. This will help to know any adverse action initiated or taken under any other law such as Customs, GST, Benami Law, etc., which will be shared in this new version of Form 26AS so that the taxpayer as well as the Income Tax officer will have access to such information.
The new Form 26AS will also provide information received by the Income Tax Department from any other country under the treaty /exchange of information about income or assets of the taxpayer located outside India.
The new Form 26AS will be a ready reckoner of the taxpayers’ complete tax profile for banks, financial institutions, or any other body while carrying out due diligence of the person/corporate concerned.
This form will now make it difficult for the taxpayer to hide information from any bank/financial institution about any proceedings against him/it as all financial transactions of purchase, sale of property investment, expenditure will get captured in this.
All tax-related information in this new version of Form 26AS will now be live as the tax department will be updating all tax-related information of each taxpayer regularly within 3 months from the end of the month in which such information is received.
Some of the information, like transactions in shares, mutual funds and properties would be available in 26AS and would get pre-filled in tax return forms to a limited extent. Taxpayers can exercise a check on the information available in 26AS vis-a-vis the actual transactions carried out by them and include any additional information like transaction cost on sale, cost of improvement at the time of purchase, etc. In a way, it will reduce the effort in tax filing process to some extent and would provide an additional check.
Information about income tax demand, refund, proceedings pending, and proceedings completed which may include assessment, reassessment under section 148,153A 153C, revision, appeal will also be shared in this Form 26AS.
Information in respect of “Specified financial transactions” will include transactions of purchase/sale of goods, property, services, works contract, investment, expenditure, taking or accepting any loan or deposits of such value as may be prescribed but not less than of INR 50,000.
Tax filers should also be aware that apart from these changes in the Form 26AS, they would now be required to disclose their Passport number if held. Presently, this information is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam. Hopefully, it will be made mandatory in other ITR Forms as and when they are notified.