Tax Evasion To Get Tough As New Form 26AS Puts High-Value Transactions Under Greater Scrutiny
As per CBDT, the improved Form 26AS will include some of the high-value transactions done by a taxpayer in a financial year
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The Income Tax Department has introduced a new Form 26AS that will provide extra details of certain high-value transactions done by taxpayers in addition to the existing details.
"From this Assessment Year (AY2020-21), taxpayers will see an improved Form 26AS which would carry some additional details on taxpayers' financial transactions as specified in the Statement of Financial Transactions (SFTs) in various categories," the official statement from Central Board of Direct Taxes (CBDT) said.
Foremost, what is Form 26AS? It is a statement made available by the IT department to a taxpayer that captures information about her Tax Deducted at Source (TDS), such as on salary by the employer and Tax Collected at Source (TCS), like on sale of property. Other details like refunds, TDS defaults and other taxes paid apart from TDS and TCS are also included in Form 26AS. Form 26AS is available on the IT website and must be used by each taxpayer when filing their IT returns to ensure that the taxes claimed are in line with the taxes specified in Form 26AS.
The improved Form 26AS will also include some of the high-value transactions done by a taxpayer in a financial year under Part E. The move aims to ease tax filing for taxpayers as the additional information will "help the taxpayers to recall all their major financial transactions so that they have a ready reckoner to enable them while filing the ITR," as per the statement.
Also, the move will bring in further accountability and transparency in the tax administration, CBDT spokesperson Surabhi Ahluwalia stated.
"It is stated that the information being received by the Income Tax Department from the filers of these specified SFTs (Statement of Financial Transactions) is now being shown in Part E of Form 26AS to facilitate voluntary compliance, tax accountability and ease of e-filing of returns so that the same can be used by the taxpayer to file her or his income tax return (ITR) by calculating the correct tax liability in a feel-good environment."
STFs will include investment in mutual funds and Fixed Deposits (FDs), purchase of bonds, shares and real estate, credit card payments, deposit in and withdrawal from savings account and buy back of shares, among other things.
Form 26AS will contain comprehensive information, including type of transaction, name of SFT filer, date of transaction, single/joint party transaction, number of parties, amount and mode of payment, among other things.
"This would help the honest taxpayers with updated financial transactions while filing their returns, whereas it will desist those taxpayers who inadvertently conceal financial transactions in their returns," Ahluwalia stated.
Additionally, the new form will also include information of transactions received up to financial year 2015-16 in Annual Information Returns (AIR) from banks, credit card companies, mutual funds and registrar (for real estate deals).