Latest Form 26AS Form : Implications

The implication of new 26AS Form of Income Tax

Background:

On 18 July 2020, Income Tax Department informed that new 26AS form is implemented

New 26AS will now include certain high-value transactions explained How does it impact you is what this explains

First let's start with basics

Q: What is Form 26AS Form?

Ans: Till now Form 26AS, was a statement that IT department used to provide you to capture

(a) TDS deducted from you (For e.g.: Your company deducting TDS on your salary)

(b) TCS: Tax collected at source (house property etc.)

Now, what has changed?

Now Form 26AS will have a new section known as *Section E*

Section E will also capture certain high-value transactions that you do in a financial year

So at a glance, it will help you see you large transactions in a year. And we explain below which transactions

Q: Tell me which transactions & what do you mean by large transactions (how large?)

Ans: For e.g.: if you invest in a mutual fund > 10 lacs in a year. That is large transactions and it will be captured in this statement

Not a single transaction, but cumulative in a year if in a single MF you invest > 10 lacs

Q: Ok I get it, tell me more which all transactions will be included?

Ans: 14 types of taxations are included and here is the full list:

1) Fixed Deposits together in Bank > 10 lacs in a year

2) Credit Card Bills > 10 lacs (in a year) if paid by cheque
and > 1 lacs if paid by cash

3) If you buy bonds > 10 lacs in a year

4) If you buy shares > 10 lacs in a year

5) If you tender shares for buyback > 10 lacs in a year

6) If you buy Foreign Exchange > 10 lacs in a year

7) If you buy MFs > 10 lacs in a year

8) Real Estate > 30 lacs

9) Purchase of Bank drafts > 10 lacs with cash

10) If you deposit cash in savings bank account > 10 lacs

11) Cash deposts or withdrawals from current account > 10 lacs

And some other routine ones (related to demonetisation)

All this will be shown in Section E in your Form 26AS of your previous years also!

Q: How does all this impact us?

Ans For honest tax payers, it is actually beneficial. Now we have a single point source of all large transactions which will help us.

For those who evaded taxes

- earlier also IT dept knew it

- Now it is putting it in their face and telling IT knows

Q: So does it mean you should do transactions < 10 lacs. For e.g.: Make a FD < 10 lacs or split it to keep those below 10 lakh?

Ans: First, this is not single transaction value. Anyways all your FDs (or other transactions as detailed above) will be cumulatively (in a single bank) looked at, So no point trying to make smaller transactions or splitting it.

Q: I am worried will IT department harass me now, if I spend too much on credit cards?

Ans: Again, honest taxpayers need not worry.

But if someone is not paying any taxes saying negligible income but spends > 10 lacs, IT department will surely Question him on how he can spend so much

Or for e.g.:, if you say you have negligible income in your tax return and make FDs in Bank of > 10 lacs or invest in MFs > 10 lacs , be ready for Questions on without income, how can you save so much

In fact for last year, based on this data, people have been identified already by IT department.

Q: Where can I check my Form 26AS?

Ans:
1) Log in to your account

incometaxindiaefiling(dot)gov(dot)in

2) Go to My Account -> View Form 26AS

All previous years is already be updated with this. So you can look at it for the past

For 2019-20, data is yet to be updated

Hope it helps!

Kindly contact your Chartered Accountant for a better understanding in the subject matter and how it affects you.

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