A comprehensive and simplified version of Form 26AS (Annual Information Statement) has been notified by the Central Board of Direct Taxes (CBDT) vide notification no. 30/2020, with effect from 01.06.2020.
Before we discuss the pros of newly notified Form 26AS, let us have an idea of from where taxpayers can download Form 26AS.
Form 26AS can be downloaded from the TRACES portal (if you login to incometaxindiaefiling. gov.in, it will re-direct you to TRACES portal) or via net banking facility of authorised banks.
The newly notified Form 26AS is more wider in its scope as it is an ‘Annual Information Statement’ contrary to the old Form 26AS, which is only an ‘Annual Tax Statement’, with details confined to TDS, TCS, advance tax paid, self assessment tax paid, etc.
The new Form 26AS will contain the details of specified financial transactions undertaken by any entity (individuals/companies/firms, etc.), such as purchase of immovable property, shares, mutual funds, etc. Also, it will contain details of
- Information relating to tax deducted or collected at source
- Information relating to payment of taxes
- Information relating to demand and refund
- Information relating to pending proceedings
- Information relating to completed proceedings
To opine that the new Form 26AS is a blessing to the taxpayers is no exaggeration. As it is simple and comprehensive, it will help taxpayers in easily identifying any incorrect information reported in Form 26AS and take corrective action at the earliest.
To make it clear, let me quote a simple example – suppose, a taxpayer is eligible for TDS credit of an amount of Rs.1,00,000/-. However, while uploading the TDS return, the deductor/bank inadvertently uploaded the TDS credit as Rs.1,000/- (wrong entry) instead of Rs.1,00,000/- (eligible credit). In this scenario, if the taxpayer checks the Form 26AS, he will be able to identify the mistake and also rectify/correct the same by requesting the deductor/bank to upload a revised TDS return with correct amount. This will enable the taxpayer to file return of income without any hassles, and also avoid delay in processing of return and delay in receipt of refund, due to TDS mismatch as a result of non-availability of TDS credit in Form 26AS.
It is relevant to mention here that information available in new Form 26AS will be updated regularly within 3 months from the end of the month in which such information is received. The main advantage of this periodic updation of information reflected in Form 26AS is that, the time gap between identifying error and rectification/correction of error will come down, which will be a great relief for taxpayers and improve the ease of filing of return. Moreover, as the new Form 26AS contains the details of financial transactions in a comprehensive manner, it will enable the taxpayer to correctly report his/her income.
It will also bring in more transparency by doing away with information asymmetry, as the taxpayer will have access to the information available with the department about his/her financial transactions for a particular financial/assessment year.
It would not be surprising, if in future, when an individual applies for a loan in bank or any other financial institution, the institutions would refer to Form 26AS of the individual to assess his tax compliance history as the new Form 26AS contains details of all the pending and completed income tax proceedings.
To conclude, the new Form 26AS is another positive initiative towards simplifying the direct taxation system in the country and to improve the ease of compliance and is really a boon to the honest taxpayer.
(The writer is Additional Commissioner of Income-tax. Views expressed are personal.)