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    Changes in Form 26 AS and its impact on filing and processing of Income Tax Return

    -CA. Prabal Godani

    Introduction

    • The Budget 2020 had proposed to expand the scope of Form 26AS by including information related to specified financial transactions and certain information on pending and completed proceedings by inserting new Section 285BB. This all could be made possible through advancement in technology and enhancement in the capacity of system used by Income Tax Department.
    • CBDT has now notified the new Annual Information Statement (AIS) to replace Annual Tax Statement under Rule 114-I in order to enhance the scope of auto populated information on the income tax web portal. It is pertinent to note that the Statement shall still be referred as “Form 26AS”.

    What was Annual Tax Statement ?

    • The Annual Tax Statement in Form 26AS was an annual consolidated tax statement that can be accessed from the income-tax website by all taxpayers through TRACES or e-filing portal. It contained the following information:
      • Details of TDS deducted against the PAN of the Taxpayer.
      • Details of TDS on sale of immovable property or rent of immovable property (u/s 194IB) (for both Buyer/Tenant & Seller/Landlord).
      • Details of TCS.
      • Details of taxes paid pertaining to that A.Y. and tax refunds received/adjusted during the year.
      • Details of high value transactions based on AIR (Annual Information Return). For example, purchase of high value mutual funds, immovable property, high-value corporate bonds etc.
      • Details of TDS Defaults.

    All you need to know about new Annual Information Statement (AIS)

    • Annual Information Statement (AIS) in Form 26AS is more comprehensive than previous Annual Tax Statement delivering more information about financial transactions of taxpayers and shall come into force e.f. 1st June 2020.
    • The new and comprehensive AIS has now been notified by the CBDT vide Notification No. 30/2020 dated 05.2020. 
    • The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or any person authorised by him shall upload in the registered account of the assessee an AIS in Form No. 26AS containing the information specified in table below, which is in his possession within three months from the end of the month in which the information is received by him :- 

    S. No.

    Nature of information

    1.

    Information relating to tax deducted or collected at source (TDS or TCS)

    2.

    Information relating to Specified Financial Transaction (SFT)

     

    ·         Cash payment purchase of bank drafts or pay orders or banker’s cheque

    Aggregating to Rs 10 lakh or more in a FY

    ·         Cash payments for purchase of pre-paid instruments issued by Reserve Bank of India

    Aggregating to Rs 10 lakh or more during the FY

    ·         Cash deposits in one or more current account of a person

    Aggregating to Rs 50 lakh  or more in a FY

    ·         Cash withdrawals from one or more current account of a person

    Aggregating to Rs 50 lakh  or more in a FY

    ·         Cash deposits in one or more accounts other than a current account and time deposit of a person

    Aggregating to Rs 10 lakh or more in a FY

    ·         One or more time deposits (other than renewed time deposit of another time deposit) of a person

    Aggregating to Rs 10 lakh or more in a FY

    ·         Credit card payments made by any person either in cash or by any other mode in a FY.

    Aggregating to Rs 1 lakh or more in cash or Rs 10 lakh or more by any other mode in a FY

    ·         Receipt from any person for acquiring bonds or debentures issued by the company or institution (other than renewal)

    Aggregating to Rs 10 lakh or more in a FY

    ·         Receipt from any person for acquiring shares (including share application money) issued by the company

    Aggregating to Rs 10 lakh  or more in a FY

    ·         Buyback of shares from any person (other than the shares bought in the open market)

    Aggregating to Rs 10 lakh  or more in a FY

    ·         Receipt from any person for acquiring units of one or more schemes of a Mutual Fund (other than transfer from one scheme to another)

    Aggregating to Rs 10 lakh or more in a FY

    ·         Receipt from any person for sale of foreign currency including any credit of such currency to foreign exchange card or expense in such currency through a debit or credit card or through issue of travellers cheque or draft or any other instrument

    Aggregating to Rs 10 lakh or more during a FY

    ·         Purchase or sale of immovable property

    Transaction value or valuation of stamp duty authority referred in Section 50C for an amount of Rs 30 lakhs or more.

    ·         Cash receipt for sale, by any person, of goods or services of any nature (other than those above)

    Exceeding Rs 2 lakh

    3.

    Information relating to payment of taxes

    4.

    Information relating to demand and refund

    5.

    Information relating to pending proceedings

    6.

    Information relating to completed proceedings

    7.

    The Board may also authorise Pr. DGIT (Systems) or DGIT (Systems) to upload any information received under an agreement referred to in section 90 or section 90A of the Income-tax Act, 1961 – Income Tax Paid in Other Country (other than India) or the information received from any other person to the extent as it may deem fit in the interest of the revenue in the AIS.

     

     Format of Annual Information Statement

    Form 26AS



    Annual Information Statement

    [See rule 114-I ]


    Financial Year:

    XXXX-XX

    Assessment Year:

    XXXX-XX


    Part A

    Permanent Account Number:


    Aadhaar Number:


    Name :


    Date of Birth/Incorporation:


    Mobile No. :


    Email Address :


    Address:

    		 

     

    Part B

    Sl. No

    Nature of information

    1.

    Information relating to tax deducted or collected at source

    2.

    Information relating to specified financial transaction

    3.

    Information relating to payment of taxes

    4.

    Information relating to demand and refund

    5.

    Information relating to pending proceedings

    6.

    Information relating to completed proceedings

    7.

    Any other information in relation to sub-rule (2) of rule 114-I

     

    Impact on Income Tax Return Filing

    • The new 'Annual Information Statement' in Form 26AS will have comprehensive information on taxes paid by the Assessee, details of pending and completed income tax proceedings, refunds along with details of specified financial transactions like purchase of shares or property etc.. 
    • The move would simplify the ITR filing process as most of the related details could be fetched from this form. The department will also be able to verify details given in the ITR and process the return quickly. 
    • With all the information/ details available at one place, it will also assist tax authorities doing e-assessment and having no/ limited interaction with taxpayers, as tax authorities will be able to easily compare information available in Form 26AS vis-a-vis information reported by taxpayer in ITR and any mismatch may be easily flagged by the systems to tax authorities.

     

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