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Wednesday, September 23, 2020

New Form 26AS for Income Tax Return (ITR) filing: What has changed, how is it useful?

Income Tax Return (ITR) New Form 26AS: According to the Central Board of Direct Taxes (CBDT), the new Form 26AS will have the financial transactions of high value that were undertaken during the previous financial year which would facilitate voluntary compliance and ease of e-filing of income tax returns (ITRs).

By: Express Web Desk | New Delhi | July 19, 2020 8:25:16 am
new form 26as, form 26as income tax department, what is form 26as, how is form 26as useful, what are the changes in the new form 26as, income tax news Income Tax Return (ITR) Filing: Earlier this year in May, the Central Board of Direct Taxes (CBDT) had notified some new rules and a new Form 26AS so as to provide a more detailed statement about the transactions made by the taxpayers. (Representative image)

The government on Saturday announced that starting from this assessment year, taxpayers across the country will see an improved Form 26AS which would carry some additional details of their financial transactions as specified in the Statement of Financial Transactions (SFTs) in various categories.

The new Form 26AS will have the financial transactions of high value that were undertaken during the previous financial year which would facilitate voluntary compliance and ease of e-filing of income tax returns (ITRs).

Earlier this year in May, the Central Board of Direct Taxes (CBDT) had notified some new rules and a new Form 26AS so as to provide a more detailed statement about the transactions made by the taxpayers.

What is Form 26AS and how is it useful?

Form 26AS is an annual consolidated tax statement generated by the Income Tax Department. It can easily be accessed from the income-tax website by all taxpayers using their Permanent Account Number (PAN).

A Form 26AS contains the amount of the tax deducted at source (TDS) of the salaried class and taxes paid during the financial year (in case of self-employed or businessmen).

While filing the ITR, taxpayers can refer to their Form 26AS and tally it with their Form 16 (provided by the employers/banks/mutual funds etc.) for the amount of taxes they paid to the treasury of the central government.

How is the new Form 26AS going to help?

In its press statement, the CBDT has explained that earlier the Form 26AS used to only provide the information regarding TDS and tax collected at source relating to a PAN, besides certain additional information including details of other taxes paid, refunds and TDS defaults.

However, the new Form 26AS 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, the statement said.

“The new Form 26AS is the faceless hand-holding of the taxpayers to e-file their income tax returns quickly and correctly,” the government release read.

CBDT said that the information received by the Income Tax Department from the filers of specified SFTs will now be shown in Part E of Form 26AS to facilitate voluntary compliance, tax accountability and ease of e-filing of returns.

The government department said the details provided in the new Form 26AS will be useful for the taxpayer to calculate the correct tax liability adding that it would also bring in further transparency and accountability in the tax administration.

CBDT release said the Part E section of the new Form 26AS will display different fields such as type of transaction, name of SFT filer (reporting firm/institution), date of transaction, whether or not its a single or joint party transaction, number of parties involved, amount of transaction, mode of payment and remarks.

The CBDT has informed that since Financial Year 2016 (FY 2015-16), the Income Tax Department has been monitoring information of high-value transactions like cash deposit/withdrawal from saving bank accounts, sale/purchase of immovable property, time deposits, credit card payments, purchase of shares and debentures, foreign currency, mutual funds, buyback of shares, cash payment for goods and services.

“Now, all such information under different SFTs will be shown in the new Form 26AS,” it said.

According to the tax body, this would help the honest taxpayers with updated financial transactions while filing their returns, whereas it will desist those taxpayers who inadvertently conceal financial transactions in their returns.

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