Latest Changes in Form 26AS that you need to know!

Form 26AS is an annual summary of all the taxes that are credited against the PAN of any taxpayer. Every tax that is deducted from the income of a taxpayer by his/her employer, bank or any other income source is mentioned in detail in this Form 26AS. 

Any advance duty or self-assessment tax paid by the taxpayer is also mentioned in this form. Any Tax Collected at Source and information related to any Tax refunds are also mentioned in this form.

Also, the complete detail of Annual Information Return (AIR) including all the information of high-value transactions made by the taxpayer reflects in this form. 

This form is vital for filing an ITR, and hence, the taxpayer should be aware of any changes made in it by the Government. The tax department has made many changes in the Form 26AS For Assessment Year (AY) 2020-2021 to improve transparency and improve communication. 

Let’s check out these changes step by step.

Changes in Form 26AS

  • Tax details and proceedings

In addition, with the tax collected, tax paid and tax gathered by you, the new Form 26AS will have information on any Self-Assessment tax. This step is crucial for almost every taxpayer. 

This will enable taxpayers to verify whether their bank or anyone else who is deducting tax from their payment has deposited the tax to the Government. 

From now on, this form will also include information regarding any pending Income Tax according to the details of any Department proceedings in the previous year. 

This is done to make the taxpayer aware of any pending Income Tax. 

  • Effective communication

The Tax department has added a lot of communication details, making it easy to reach the taxpayer. In the older version, only Name, PAN and Address of the taxpayer were mentioned. 

But after this modification, email id, Mobile no and date of birth will be mandatory. This is done to simplify the communication between the taxpayer and the Tax Department. It will also help the taxpayer to amend any details whenever necessary.

  • More transparency 

Government is betting for higher transparency from the taxpayers. To ensure all the transactions made by taxpayers are perfectly legal, from now on any purchase of share, cash withdrawal and deposits from the saving account, purchase of immovable property, cash payment and buybacks of shares will be thoroughly monitored.

This is being done to plug any holes in the system that allowed taxpayers to avoid tax. 

  • Financial transaction details

As per the incumbent system, various small businesses like Mutual funds Stock Exchanges, NBFCs and banks had to submit the details of transactions above a certain threshold to the department.

From now on, all these details will be made available with the Form 26AS. These details include any large sum paid to banks in the form of DD, Cash deposited and Cash withdrawn above a certain limit. 

As per the existing law, these details are submitted to the Income Tax department by the institutes in which investments are made. The maximum threshold limit for one person in one bank account is INR 10 lakh for a savings account in one year.

  • Other changes

Apart from the changes as mentioned earlier, the new Form 26AS will also incorporate details of foreign exchange transactions, acquisition of bonds & debentures and purchase of a share. 

Also, the details of the steady property exceeding INR 30 lakh will be available with Form 26AS. 

In short, every transaction detail that is available with the Income Tax department will be made available with 26AS. This will be very helpful to the taxpayers in checking whether all the details available with the tax department are correct or not.

If you find any information faulty, you can make necessary correction in it by filing an application to the relevant department.

Final thoughts

Latest changes in Form 26AS are highly informative. These changes will help taxpayers in maintaining their Tax Compliance without any last-minute hassle. With more information and necessary details on hand, the taxpayers will be more responsible while filing their ITR. This will prevent any unnecessary notices generated from the tax department.

On the other hand, the latest 26AS form will help the Income Tax Department to tackle any illegal transactions and taxpayers who intentionally hide their income.

Probal Consulting Group is a leading Taxation, Accounting and Compliance firm that helps individuals, MSMEs and other businesses manage their accounting, taxation regulatory compliance affordably.

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