Understanding Form 26AS – Your Tax Credit Statement

The month of July is Income Tax Return (ITR) filing month. The due date for salaried taxpayers and business persons/ professionals who are not required to get their accounts audited is 31^st July. This year onwards, filing your ITR after the due date will attract a late fee ranging from Rs. 1,000 to Rs. 10,000 depending on what your income is and when you finally file your ITR. Hence, it definitely makes sense to file your ITR before the due date.

Once you have collected all the documents required for purpose of preparing your ITR, make sure you also reconcile your incomes and tax deductions from the records available with Income Tax Department. You can do this with Form 26AS, which is your tax credit statement. It’s not that all your incomes are being reflected therein, but only those incomes will reflect on which TDS has been deducted or was liable to be deducted. You should cross-tally all the details mentioned in Form 26AS and ensure that the TDS and income details appearing therein are not missed out while preparing your ITR.  Further, it should also be ensured that all the transactions occurring in the statement are pertaining to your own transactions only and not occurring in your PAN erroneously

Here is your small guide to understanding Form 26AS:

1. Basic Details – The first and foremost information on Form 26AS pertains to your basic details. This will include your name, PAN, the financial year & the assessment year for which the statement is being displayed and the address as registered in PAN records. While you are preparing your ITR for the current year, make sure that the Financial year being displayed is 2017-18 with the corresponding Assessment year 2018-19.

1. Part A – Details of Tax Deducted at Source – This will display the taxes deducted by your employer, your bank, and others for payments made to you. It displays the following:
   1. Name and TAN of the deductor – You will need these details to fill the same in your ITR to claim the tax credit. Since the tax credit matching is done automatically by the system, make sure to enter the TAN details in ITR carefully as even a slight mismatch will invalidate your tax claim.
   2. Date of the transaction
   3. Section under which tax deduction has been made – TDS is deductible under various sections and this column helps you get an idea of what kind of payment it is. e.g. details against section 192 will reflect such payments received from your employer as salaries, 194A reflects interest on bank deposits, bonds etc.
   4. Amount Paid
   5. Tax deducted and tax deposited – This should ideally be the same figures.

3. Part A1 – Details of Tax Deducted at Source for 15G/15H– Form 15G/ 15H are submitted by individuals/senior citizens if they consider that their income will be lower than the basic exemption limit and hence, a tax deduction may not be necessary. However, the facility to submit Form 15G/15H for no tax deduction is not available for all the payments and only some sections like 194A etc. This particular section will reflect the payments made against Form 15G/15H. Hence, even if there has been no tax deduction, the information for incomes paid against Form 15G/15H is still submitted by the payer. So, you must disclose such incomes in your ITR. Part A1 also reflects the information in the similar format as discussed in Part A above.

4. Part A2 – Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA/ TDS on Rent on Property u/s 194IB (For Seller/ Landlord of Property) – has made a buyer of an immovable property liable to deduct tax in case the transaction value exceeds Rs. 50 lakhs as per the rate specified. Further, in case an individual or HUF (whose books are not required to be audited) is paying a monthly rent of Rs. 50,000 or more, tax is required to be deducted at 5%. In case the payer is required to get his accounts audited, tax deduction will fall under Section 194I which has different procedural requirements.

Considering that these payments are infrequent, a regular TAN registration is not required and the details of tax deduction are provided in a separate form to the Income Tax Dept. basis your PAN. Hence, instead of TAN of deductor, the statement will reflect PAN of the deductor.

5. Part B – Details of Tax Collected at Source – Just like tax deduction made by the payer of the transaction, tax collection is required to be done in specified cases like the sale of scrap etc. by the seller. The motive for prescribing such provisions is to capture such transactions so that the same is ensured to be reported in the ITRs and tax duly paid thereon.  

6. Part C – Details of Tax Paid (Other than TDS or TCS) – This segment will highlight the tax payments made by the taxpayer himself which may be in form of self-assessment tax, advance tax, payments against specific demand etc. For the purpose of claim in ITR, you will require BSR code of the bank where payment is made, amount of tax paid and Challan Serial Number. You can find all these details in this segment for the transactions reflecting therein.

7. Part D – Details of Paid Refund – This segment will reflect the details of refunds paid to you during the financial year. While the tax refund as such is not subject to tax, any interest on income tax refund paid by the Income Tax dept. should be declared as income and subject to tax. Make sure you do not miss out declaring your interest on IT refund in your ITR as Income from Other Sources.

8. Part E – Details of AIR Transactions – This segment will reflect the high-value transactions made by you during the financial year. As per the current provisions of Income Tax Act, certain high-value transactions, as may be specified, are required to be reported by specified entities in the Statement of Financial Transactions (SFT) to the Income Tax Dept. SFT has been introduced from FY 2016-17 onwards and prior to SFT framework, such information used to be submitted in Annual Information Return (AIR).

An illustrative list of the transactions required to be reported under SFT is:

1. Cash payment for the purchase of DDs/POs of amount aggregating Rs 10 lakh or more in a year
2. Cash deposit aggregating Rs 10 lakh or more in Savings account
3. One or more time deposits (other than those through the renewal of another time deposit) of a person aggregating Rs 10 lakh or more
4. Receipt from a person aggregating Rs 10 lakh or more for acquiring units of Mutual Fund
5. Purchase/Sale by any person of immovable property for Rs. 30 lakh or more or valued by the stamp valuation authority at Rs 30 lakh or more
6. Receipt of cash payment exceeding Rs 2 lakh by any person for sale of goods/services

When any such transaction is occurring in your Tax Credit Statement, you must make sure that the sources of income are duly accounted for in your ITR.

9. Part F – Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA/ TDS on Rent of Property u/s 194IB (For Buyer/ Tenant of Property) – As we discussed in S. No. 4 – Part A2 above, the information in respect of TDS on sale of immovable property u/s 194IA and TDS on rent of property u/s 194IB is submitted on the basis of PAN of the deductor. As such, this segment will reflect the details submitted by the buyer/ tenant himself. This segment essentially captures the compliances made by the buyer/ tenant and as such, if you have undertaken any such transactions during the current year, the compliance made by you should also be duly reflected in the Form 26AS. In case it is not getting reflected here, there might be any mistake in the submission of the information and as such, you should take the matter with the concerned authorities to get the same rectified. In the times of information matching through the system, any such gaps may lead to a receipt of notice from Income Tax Dept.

10. Part G – TDS Defaults (Processing of Statements) – This seeks to reflect all the defaults in the respective TANs registered under your PAN. This will include the cases of short payment, short deduction, late payment of tax, late filing fee etc. TDS defaults are liable for separate assessment proceedings and as such, it is always in your interest that this segment should always be clean and Nil.

Further, an important thing to note while claiming tax credit through Form 26AS is that the status of booking being reflected against the details of transaction and tax deduction should be ‘F’ which means Final and conveys that the details of the tax payment are matching with the tax returns so filed by the deductor/ collector. Accordingly, such a claim is fit for tax claim in the ITR as well.  

Form 26AS is just like your statement of account available with the Income Tax Dept. So, you must ensure that all the transactions reflecting therein are pertaining to you and are duly accounted for as well in the ITR.

Hope this helps you with understanding your Form 26AS better for the purpose of ITR filing. For any queries, do leave a comment below.

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