Form 26AS, your Annual Tax Statement has changed – What should you know about it?

Form 26AS is an important document which plays a big role in your tax filing process. It is the document that you refer to verify and pick information to file your tax return. This form is also known as the Tax Passbook or the Annual Tax Statement as it shows all financial transactions that require to be reported to the Income Tax Department for the financial year. It includes all information regarding Tax Deducted at Source(TDS) on your salary, other income, interest received from the bank, demands, refunds etc. 

Recently, the Central Board of Direct Taxes announced that a new Form 26AS will replace the old one. The new form will carry more information about the various transactions carried out by the individuals and will include details received under the Double Taxation Avoidance Agreement, Tax Information Exchange Agreement or even proceedings on penalties, etc. 

This form was also introduced to make the process of tax filing, tax return processing and assessment more effective.

Let’s look at all the changes in the new Form 26AS so that when you file taxes by the 30 Nov this year, you make the best use of the changes introduced in the form. 

Changes in the New Form 26 AS

The New Form is divided into 2 parts –  A & B, where Part A will show all the personal details and Part B is all about your tax deductions, specified financial transactions, tax paid, penalties, pending or completed proceedings, etc

Changes in Part A – Personal Details

Right from your personal details, the new Form 26AS looks to provide more details. The earlier form captured details such as your full name, PAN number and your address. Going ahead, the new form will include additional details such as your date of birth/incorporation( for companies/partnerships/Sole proprietors), Aadhaar number, mobile and email address as well.

Inclusion of these details will help you verify if all your details with the Income Tax dept and other agencies where you conduct financial transactions are the same, and get them corrected, if necessary.

Changes in Part B – Financial Details

Let’s go through all the sections under Part B and at the same time, take a stock of changes brought about.

Information about tax deducted or tax collected at source

All information about tax deducted at source or tax collected at source can be found in this section. This section formed the cornerstone of the earlier Form 26 AS. This section continues to show all transactions where tax has been deducted and deposited against your PAN.

You can make use of this section of the Form 26AS to check if your employer/others who have deducted tax have made payment into the government treasury against your PAN. Also, when you file your tax return electronically, the details from this section are automatically picked up.  

Information related to specific financial transactions (SFT)

This section is a fresh addition to the Form 26AS. 

Currently, high-value transactions such as the ones below when incurred above a certain amount are reported to the Income Tax Department by various agencies like banks, mutual fund houses, SEBI, credit card issuers, etc.

• Investments in mutual funds, equities, corporate bonds or debentures,
• Sale or purchase of immovable property (real estate)
• Foreign currency transactions
• Cash deposit or withdrawal from an account, 
• Cash payment for bank drafts
• Payment of credit card bills or for any goods or services in cash/electronic means or 
• Buyback of shares above a certain limit 

The threshold limit for transactions to be reported can vary based on the value of the transaction and the mode of the transaction (cash or electronic transfer).

With the introduction of the new version, all these transactions will be shown to the individual on the Form 26AS. So, the taxpayer is expected to include all relevant details from this section while filing tax returns.

The changes in this section are done to encourage transparency in tax filing and avoid instances non-reporting and tax evasion. 

Information related to payment of taxes

In case, you have paid self-assessment tax or advance tax during the financial year, all those transactions are reflected in this section. This feature was available even in the old Form 26AS.

Information relating to demands and refunds

Once you file your tax return, it is assessed by the Income Tax officials to see if you have paid the taxes in tune with the existing rules and regulations. If there is any extra tax to be paid, you would be intimated in the form of a demand. On the other hand, if you have paid any extra tax, you would be refunded the same.

Any demands and refunds that arose during the financial year are reflected in this section of the Form 26AS. Earlier, you would have to log on to your e-filing account to check out the information regarding demands whereas refunds already paid was available on Form 26AS.

Information relating to pending and completed tax proceedings

The new form will show you details of all the pending tax proceedings which is on-going with the IT dept. You could also see details of completed tax proceedings, if any, against your PAN.

How to view your Form 26AS?

You can view and download your Form 26AS as usual from the TRACES website or from your Net Banking account of certain banks.

Overall, the improved form is a big step towards ensuring better tax compliance, make tax filing easier and ensure transparency in the tax assessments. Make sure you make good use of it to keep a track of all the information provided not only during the filing process but through the year.