The Central Board of Direct Taxes (CBDT) has introduced a new auto-generated 'Form 26AS' to assist the taxpayers while filing their Income Tax Returns (ITR). The new form 26AS will follow a faceless process and will be effective from the current assessment year.
The new form has been adopted to ensure that taxpayers no longer fail to report large financial activities while filing their annual income tax returns (ITRs), including cash deposits and withdrawals, investment in equity and mutual funds, and property transactions.
"CBDT recently brought out the new form 26AS for ease of filing of Income Tax Returns (ITRs) by taxpayers. The new form is a faceless handholding of taxpayers, to help them with updated financial transactions, so as to facilitate voluntary compliance &easy e-filing,'' said the Income Tax (I-T) department in a tweet.
What is form 26AS?
Form 26AS is an auto-generated financial statement containing tax-related material, including high-value transaction data. Previously, the form used to include specific information relating to source tax deductions (TDS) and source tax collected (TCS) in addition to some supplementary information providing specifics of other taxes charged, refunds, and TDS defaults.
'Form 26AS' maintained data of an Annual Information Report (AIR) of transactions but after updation it will have include specified financial transactions (SFTs) to aid the taxpayers recall all their major financial transactions. A statement from CBDT highlighted, "Now all such information under different SFTs [Statement of Financial Transactions] will be shown in the Form 26AS."
It is to be noted that the information being accessed by CBDT from the SFT filers will have information like date and type of transaction like single/ joint party transaction, a number of parties, amount, mode of payment and related fields will now be shown in part E of the new form 26AS.
The new form will not only help taxpayers filing returns but also reduce litigations as genuine taxpayers will not miss filing any transaction in their ITRs. On the other hand, it will also identify taxpayers who would try to hide the details.