Form 26AS is the annual tax credit statement which can be downloaded from the taxpayer's account on the income tax portal.
Until May 2020, it contained the following data for a particular taxpayer for each financial year:
- Tax withheld/collected at source by various deductors/collectors as well as the corresponding income, compiled from the E-TDS returns filed by such deductors/collectors. This included tax withheld by employer, banks, tenants, buyers of property, etc.
- Advance taxes paid, self-assessment taxes paid and refunds received from the tax department.
- High value transactions reported in the annual information return. For example, purchase of property exceeding Rs. 30 lakh.
Hence, it gave a summary of income and taxes as per the tax authorities' database. Given this, the taxpayer could use Form 26AS to check the income reported and taxes withheld before filing his/her income-tax return.
With effect from June 1, 2020, Form 26AS has been updated to capture more information about the taxpayer and is now referred to as the annual information statement. It now provides data, not just of the tax deducted/collected at source and the corresponding income, but also information about other financial transactions of taxpayers so that there is a ready reference to file their tax returns and get an overview of the assessment status.
The broad heads under which the information will be reported in the new Form 26AS are:
- Information relating to tax deducted or collected at source
- Information relating to specified financial transactions
- Information relating to payment of taxes
- Information relating to demand and refund
- Information relating to pending proceedings
- Information relating to completed proceedings
- Information received under tax information exchange agreements
Information on tax deducted or collected at source and information relating to payment of taxes would be the same as that of erstwhile Form 26AS while the information on demands, information on pending proceedings, completed proceedings and information received under tax information exchange agreements are new.
Information relating to specified financial transactions has been made comprehensive by including information on cash deposit/withdrawal from bank accounts, sale/purchase of immovable property, time deposits, credit card payments, purchase of shares debentures, foreign currency, mutual funds, buy back of shares, cash payment for goods and services, etc.
The aforesaid information will only be reported in Form 26AS if the transaction crosses certain threshold limits. It is worth noting that this information was also available with the tax authorities for earlier years and was used at the time of assessment proceedings. Providing this data to the taxpayers beforehand is hence likely to increase transparency in the tax proceedings.
Information relating to assessment proceedings, both pending and completed, has been included and it will show if assessment proceedings have been initiated and if yes, whether they are pending or completed.
The information will reflect in Form 26AS within three months from the end of the month in which the said information is received by the tax authorities.
In addition to the name, permanent account number (PAN ) and address of the taxpayer, the new form will also have the date of birth, mobile number, email address and Aadhaar number as per the tax department's database.
Form 26AS will thus be an all-inclusive document for ease of reference for taxpayers both at the return filing stage and at the time of assessment proceedings.
(Homi Mistry is Partner, Deloitte India; Mousami Nagarsenkar is Director and Hiral Tanna is Manager, Deloitte Haskins & Sells LLP)