All You Need To Know About Changes In Income Tax Laws That Will Affect You

What is Form 26AS??

Form 26AS is a consolidated annual tax statement that contains all the tax-related information of the taxpayer. For instance, earlier it mostly reflected the amount of tax deducted, or tax collected at source, self-assessment or advance tax paid, information relating to high-value transactions, demands and refunds, etc. ?The list of details has now expanded. ?

“Form 26AS is an essential document as it helps taxpayers verify if the taxes deducted or collected on their behalf have been accurately deposited promptly with the government. A taxpayer must cross-check the tax deducted and collected details mentioned in Form 26AS to match their taxes,” says Archit Gupta, founder and CEO, ClearTax, a tax firm. For example, if your employer has deducted a part of your salary towards Provident Fund, or if tax has been deducted at source (TDS), the details can be cross-checked in Form 26AS.?

Last year as well, some major amendments were made in Form 26AS. These included details of any high-value financial transactions of that financial year. ?

New Amendments?

In the new Form 26AS, the following details will start reflecting now:

1. Details of any foreign remittances.?

2. Salary breakup of various components to be reported by the employers.?

3. Off-market transactions reported by Depository/Registrar and Transfer Agent (RTA).

4. Details of mutual fund purchases and dividends received.

5.Interest on refunds of the previous year.

6. Other taxpayers’ information in ITR.?

“With the foreign remittance details in the hands of authorities, the taxpayers will have to be cautious to be compliant with the Income-tax Act and FEMA (Foreign Exchange Management Act). Previously, off-market transactions got side-lined as they were not being reported to the department,” says Gupta. Thus, the main idea behind these changes is to facilitate voluntary compliance by taxpayers.? ?

Under the previous amendments, details such as foreign remittances and mutual funds purchases above a certain limit were to be captured if they exceeded a certain limit. “These changes are beneficial to the taxpayer as they can check the details of Statement of Specified Financial Transactions (SFTs) reported by different entities. These SFTs will help them recall the financial transactions and file their income tax return accordingly in line with Form 26AS,” says Ruchika Bhagat, managing director of chartered accountancy firm Neeraj Bhagat & Co.??

Experts believe that extending the scope of Form 26AS will make ITR filing simpler for taxpayers as more details will be available in just one statement.?

“In the new Form 26AS, the income-tax department will also provide details of demands that are outstanding. This type of information will help you verify whether the same demand is genuinely outstanding or disputed,” says Bhagat. If it is a disputed demand, one can rectify the mistake, or fill an appeal or application for condonation of delay if the due time already passed.?

The changes make Form 26AS more comprehensive and mean no additional burden for those taxpayers who have already disclosed the details of their transactions. ?