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Form 26AS is an important document for a taxpayer to file his income tax return (ITR) and to get essential tax information. Whereas, the scope of Form 26AS has been enlarged by the Finance Act, 2020. The existing enabling provision of section 203AA was omitted with effect from 01-06-2020 and a new section 285BB has been introduced from the same date. In order to understand the applicability of the latest changes. First, let’s understand what is Form 26AS:
A taxpayer may pay tax in any of the following forms:
(1) Tax Deducted at Source (TDS)
(2) Tax Collected at Source (TCS)
(3) Advance tax or Self-assessment Tax or Payment of tax on regular assessment.
The Income-tax Department maintains the database of the total tax paid by the taxpayer (i.e., tax credit in the account of a taxpayer). Form 26AS is an annual statement maintained under Rule 31AB of the Income-tax Rules disclosing the details of the tax credit in his account as per the database of Income-tax Department. In other words, Form 26AS will reflect the details of tax credit appearing in the Permanent Account Number of the taxpayer as per the database of the Income-tax Department. The tax credit will cover TDS, TCS and tax paid by the taxpayer in other forms like advance tax, Self-Assessment tax, etc.
Income-tax Department will generally allow a taxpayer to claim the credit of taxes as reflected in his Form 26AS.
Latest Amendment in Form 26AS for taxpayers:
The scope of Form 26AS has been expanded w.e.f. 01-06-2020.
A new rule 114-I has been inserted to the Income-tax Rules, 1962 which provides that an annual information statement in Form No. 26AS shall be uploaded, by the Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems) or any person authorised by him, in the e-filing account of the assessee.
Such statement shall be uploaded within 3 months from the end of the month in which the information is received by him.
New Form 26AS is divided into 2 parts:
1. Part A contains certain basic information of the assessee,
i.e., Permanent Account Number, Aadhaar number, Name, date of birth/Incorporation, Mobile number, Email address and address.
2. Part B contains the information in respect of the following transaction:
a) Information relating to tax deducted or collected at source;
b) Information relating to Specified Financial Transactions (SFT);
c) Information relating to the payment of taxes;
d) Information relating to demand and refund;
e) Information relating to pending proceedings;
f) Information relating to completed proceedings; and
g) Information received from any officer, authority or body performing any functions under any law or information received under an agreement referred under section 90 or section 90A or information received from any other person to the extent it may be deemed fit in the interest of the revenue.
These changes were notified by the government via a notification dated May 28, 2020.
Conclusion: The new Form 26AS is the faceless hand-holding of the taxpayers to e-file their income tax returns quickly and correctly whereas chances of it being misused cannot be ruled out. Though, many entities/institutions and organisation can use the latest Form 26AS more efficiently as a due diligence tool at the time of lending money to taxpayers.
Article By: Ms Bhavya Sharma, a Practising Company Secretary from Delhi. In order to know more about Form 26AS and related queries, you can connect with us. You can contact us at legal@bhavyasharmaandassociates.com or visit: www.bhavyasharmaandassociates.com
Disclaimer: Although due care and diligence have been taken in the preparation and uploading this Article, Bhavya Sharma & Associate shall not be responsible for any loss or damage, resulting from any action taken on the basis of the contents of this Article. Anyone wishing to act on the basis of the material contained herein should do so after cross-checking with the circulars, notifications, applicable acts, press release issued by the concerned department or seek appropriate counsel for their situation. [1]Income Tax Act, 1961
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