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Govt Notified: Latest revised Form 26AS with effective from 1 June 2020
Latest Form 26AS with effect from 1 June 2020: With effect from 1 June 2020, all data of the taxpayer will be available in the new Form 26AS:
- Tax withheld at source and tax assessed at source
- Details of financial transactions listed
- Income tax payments such as advance tax and self-assessment tax paid by the taxpayer
- Tax requirements and tax refunds
- Pending and completion of the income tax procedure
Pursuant to Section 203AA of the Income Tax Act, 1961, the Director-General of Income Tax Systems shall apply a declaration in Form 26AS to any individual whose income tax has been deducted or collected and whose tax has been paid. Form 26AS is a statement that includes instructions of all taxes paid by or on behalf of the assessee. In order to extend the scope of Form 26AS, Section 203AA of the Finance Act 2020 has been excluded with effect from 01-06-2020 and new Section 285BB has been formed from the very same date.
The Central Board of Direct Taxes (CBDT) is therefore void Notification No. G.S.R. 329(E), dated 28-5-2020, has omitted Rule 31AB and inserted new Rule 114-I. Rule 114-I provides that the 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 authorized by him to the e-filing account of the assessee. The declaration shall be uploaded within 3 months of the end of the month in which it receives the information.
The framework of the introduction of the new Form 26AS has been extended to include certain additional data, such as data obtained under the Double Taxation Avoidance Agreement or the Tax Information Exchange Agreement.
New Form 26AS has now been classified into two sections.
Part A includes some basic details of the assessee, e.g. permanent account number, Aadhaar number, name, date of birth/incorporation, telephone phone, e-mail address, and location.
Part B includes the details pertaining to the following transaction:
(a) Information relating to the tax deducted or collected at source;
(b) Details pertaining to Specified Financial Transactions (SFT);
(c) Details relating to the payment of taxes;
(d) Data relating to the request and refund;
(e) Data relating to the proceedings pending;
(f) Data relating to the completed proceedings; and
(g) Data gained from any officer, authority or body conducting any function under any law or information received pursuant to an agreement referred to in Section 90 or Section 90A or information received from any other person to the extent that it may be considered appropriate for the purposes of the revenue.
Details relating to Specified Financial Transactions will be reflected in Form 26AS only if:
(1) such transaction has been entered for an amount exceeding the limit is set out in section 285BA, as set out in Rule 114E. Illustration: cash deposited or withdrawn from one or more current accounts for an amount of Rs. 50 lakh or more; and
(2) The person for whom the contract has been performed has received a description of the financial transaction.
The govt has yet to notify or make clear the specified financial transactions disclosable in the new Form 26AS. The new form is in accordance with the 2020 budget announcement to facilitate compliance and the appropriate payment of taxes.
Form 26AS details list to include mutual funds, foreign remittances
- The scope of information included in Form 26AS has been broadened to incorporate more high-value financial transactions and other information. According to the taxman's new requirements, the Form 26AS will include information on international remittances, mutual fund (MF) purchases, and information from other taxpayers' ITRs.
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CBDT expands Form 26AS info list; includes foreign remittances, MF buys (Tax dept has expanded the list of high-value financial transactions which would be available to taxpayers in their form 26AS by including foreign remittances, details of mutual fund (MF) purchases, as well as information in ITRs of other taxpayers)
Form 26AS is an annual consolidated tax statement that taxpayers can obtain by entering their PAN on the Income Tax Department's website. The decision to include additional information in the paper is expected to make faceless evaluations easier. - On October 26, the CBDT issued an order under Section 285BB of the Internal Revenue Code that broadened the scope of information to be disclosed on the new Form 26AS.
- In the Union Budget 2020-21, Section 285BB was added to the Income-tax Act to transform Form 26AS into a 'Annual Information Statement,' which, in addition to TDS/TCS details, would include comprehensive information of specified financial transactions, tax payments, demand/refund, and pending/completed proceedings undertaken by a taxpayer in a particular financial year that must be mentioned in tax filings.
- Following that, the Income Tax Department announced the new Form 26AS in May of last year, which included information on high-value financial transactions made during a financial year, facilitating voluntary compliance and e-filing of income tax returns.
- The list of details to be available in Form 26AS has been expanded further with this October 26 order.
- Foreign remittances made by any person through an authorised dealer, salary breakup with deductions claimed by the employee, information in other taxpayers' ITRs, interest on Income Tax Refund, and information published in Statement of Financial Transactions are all examples of additional information recommended by the direct tax authority.
- Off market transactions reported by the depository/registrar and transfer agent, information about mutual fund dividends reported by the RTA, and information about mutual fund purchases reported by the RTA would all be included in Form 26AS.
- The CBDT has authorised the "Director General of Income-tax (Systems) to upload information...in her/his possession, in the Annual Information Statement in Form 26AS in the electronic filing account registered by the assessee in the designated portal, within 3 months from the end of the month in which the information is received by her/him, in the electronic filing account registered by the assessee in the designated portal, within 3 months from the end of the month in which the information is received by her/him."
- This additional reporting in Form 26AS will assist both taxpayers and tax authorities in determining a taxpayer's profile and improve information flow between taxpayers and tax authorities.
- It will also aid taxpayers in identifying and correcting any incorrect information or detail reported on Form 26AS, he noted.
- The CBDT said last year that the I-T department had been receiving information like cash deposits/withdrawals from savings bank accounts, sale/purchase of immovable property, purchase of shares, credit card payments, debentures, mutual funds, foreign currency, and cash payment for goods and services since FY2016.
- All of this information will now be displayed on the new Form 26AS under various statements of financial transactions.
- The information obtained by the department from filers of these specified statement of financial transactions is now displayed in Part E of Form 26AS to facilitate voluntary compliance, tax accountability, and ease of e-filing of returns, so that the taxpayer can file her or his income tax return by calculating the correct tax liability in a feel-good environment.
- Different fields such as type of transaction, name of statement of financial transactions filer, date of transaction, single/joint party transaction, number of parties, amount, mode of payment, and remarks are also shown in Part E of the form.
