Is Form 26AS a more than your tax details now?
The Journey of Form 26AS from an " Annual Consolidated Tax Statement" to " Annual Information Statement" has been very much interesting providing more than just your tax details. The Central Board Of Direct Taxes on 28th May 2020 released an official notification regarding the updation in Form 26AS, which came into effect on 1st June 2020. The amendment expanded the scope of the Form 26AS beyond the TDS details to all your Financial Transaction of a Financial Year. The new form would curb tax evasion, would improve transparency among the taxpayers and the authorities........and much more, read this article to find out.
Recently on 28th May 2020, the Government brought out a notification on the renewed Form 26AS, which created a buzz among the taxpayer. But before that let us first know what exactly the Form 26AS was for?
Form 26AS or the Annual Consolidated Credit Statement issued under Section 203AA of the Income Tax Act, 1961 was the statement containing comprehensive information about the deductee’s i.e. One from whom tax is deducted such as:
This form serves as a proof for your tax details but there was still lack of details regarding the income of the assesses due to which there were still chances of Misreporting of Income. So with effect from 1st June 2020, old Form 26AS stands withdrawn and a new statement "Annual Information Statement" has been brought out.
What is the Annual Information Statement?
With the power conferred under section 285BB of the Income Tax Act, 1961, in the recent budget of Financial year 2020-21, rule 31AB of the Income Tax Rules, 1962 stands omitted and a new rule 114-I was introduced which has come into effect since 1st June 2020.
A better and clear version of Form 26AS ensures more transparency between the taxpayer, the government, and the payee. However, the new "Annual Information Statement" created a bit of uneasiness among the taxpayers……but why and what are the changes involved?
As this is the era of internet and digitalization, following fields were added apart from the name, PAN, and address of the assessee:
would be displayed ensuring easy communication and tracing of the payer. Moving towards the further important additions, following points have become the new highlights:
These details were missing from the previous Form 26AS but were reported by the authorities in Form 61A, the availability of the details in the Form would ensure both the Income Tax Authorities, as well as the payee that the correct information has been submitted and the mistakes, can be rectified easily.
The information regarding the same would be available in the Form 26AS, the assessee and the Income Tax Department would know about the disputed amount as well as the amount paid or pending as This would also save time for the authorities as a better selection of returns for scrutiny. And the payee would also be well informed about his dues.
My Views welcoming the move:
Though with much more of disclosure in the Form 26AS would make people feel that the privacy regarding Income has been invaded but as being one of the professionals, I would say the changes brought out by the government are welcome changes as this would certainly increase the compliance of the Income Tax Act, 1961 and would also reduce the Income Tax Assessments. The regular updation of form would also ensure that the correct data of the payee has been shown and submitted to the Government. This would also help in easy filing of the Income Tax Returns as all the information along with the tax details would be available at a single place and the payee will also be able to check for the mismatch. The form would be fruitful to the Payer, the Payee, and the Government as well, as in absence of information there are chances where the deductions of tax can be denied and Form 26AS avoids this. Not only the updation would prove useful under the Income Tax Act, 1961 but also under the GST Act 2017, The Benami Law, etc. A complete Financial History of a person for a full year will just be available in a single form.
My suggestions for further improvement:
Certain other points like the travel history of a person outside India can also be added, giving clear cut clarity for the person in defining his Residential status the condition for which being that the person Resides in India for a minimum of 182 days in a year. The details of property received due to the Law of Inheritance giving a much easier computation of Income.
The original notification by the Income Tax Department can be viewed here