The new Form 26AS will provide the information available with the tax authorities like sale and purchase of property transactions amongst others.
For those taxpayers who had failed to save tax in the FY 2020, the government had given them time till June 30, 2020 to complete their tax planning exercise. Further, the last date to file ITR for the financial year 2019-20 had been extended from July 31, 2020 to November 30, 2020. While you start the ITR filing, make sure you take into account the new changes brought about in Form 26 AS.
The government has brought about changes in the Form 26 AS which is essentially a statement of all the tax deducted at source (TDS) against your PAN. For a salaried individual, Form 16 shows the TDS accounted for by the employer but Form 26 AS takes into account any such TDS by other Deductors such as banks etc. Effective June 1, 2020, there are certain changes in the format of the Form 26 AS.
According to Aarti Raote, Partner, Deloitte India, the new Form 26AS will provide the information available with the tax authorities like –
(i) Information relating to tax deducted or collected at source
(ii) Information relating to specified financial transaction like sale/purchase of property, investments, pending proceedings and demands.
(iii) Information relating to payment of taxes
(iv) Information relating to demand and refund
(v) Information relating to pending proceedings
(vi) Information relating to completed proceedings
To locate your Form 26 AS, you just need to log-in to the e-filing portal of the income tax department. “The 26AS is available to the tax payer through the registered account of the tax payer on the tax portal. For this purpose one needs to access the tax portal, log into one’s tax account and click on “View Form 26AS” under the ‘My account’ tab. This will take you to the TRACES website which displays the Form 26AS,” says Raote.
At times, there could be a mismatch between the figures in Form 16 and Form 26AS which should be rectified before filing ITR. “Considering that Form 26AS provides details of the financial transactions of the tax payer, it is necessary that the tax payers take the same into cognizance before submitting their tax return and reconcile the amounts reported in Form 26AS with the amounts they are going to report in the tax return,” informs Raote.
Also, according to Raote, there are a few important watchouts for taxpayers in the New Form 26AS:
1. It may be noted that Form 26AS is not an exhaustive report of one’s financial transactions – it captures only those transactions that exceed the specified threshold only e.g. Cash deposits of Rupees 10 lakh or more in savings bank accounts during a year or property sale or purchase if the transaction value exceeds 30 lakhs or investments in mutual funds beyond a particular limit etc.
2. As regards income, details of income only where taxes are withheld are reported in Form 26AS. However, there may be other transactions which do not exceed the monetary threshold or other income like savings bank interest and monthly rentals below Rs 50,000 which would not be reported in 26AS but have to be included in the total income. Hence the taxpayer needs to make sure that he is including other income details in addition to what has been captured in Form.