Income Tax Return (ITR) Filing Alert! CBDT has this big news for taxpayers

The Income Tax Department on Saturday said the new Form 26AS would have additional details of taxpayers' high-value financial transactions undertaken during a financial year and would facilitate voluntary compliance and ease of e-filing of I-T returns. Form 26AS is an annual consolidated tax statement that can be accessed from the income-tax website by taxpayers using their Permanent Account Number (PAN).

The earlier Form 26AS used to give information regarding tax deducted at source and tax collected at source relating to a PAN, besides certain additional information including details of other taxes paid, refunds and TDS defaults.

But now, the new form will have Statement of Financial Transactions (SFTs) in various categories to help taxpayers recall all their major financial transactions so that they have a ready reckoner while filing the ITR, the Central Board of Direct Taxes (CBDT) said in a statement.

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In May, CBDT had notified the revised Form 26AS, containing details of tax collected or deducted at source which will now include information pertaining to property and share transactions.

With this, Form 26AS has been revamped to an ''Annual Information Statement'' which apart from the TDS/ TCS details, shall now contain comprehensive information relating to specified financial transactions, payment of taxes, demand/ refund and pending/completed proceedings undertaken by a taxpayer in a particular financial year that has to be mentioned in the income tax returns.

In a statement, CBDT said the Department used to receive information like cash deposit/withdrawal from saving bank accounts, sale/purchase of immovable property, credit card payments, purchase of shares, debentures, foreign currency, mutual funds, cash payment for goods and services, etc. From ?specified persons" like banks, mutual funds, institutions issuing bonds and registrars since Financial Year 2016 onwards.

Now, all such information under different SFTs will be shown in the new Form 26AS, it added.

The information being received by the Department from the filers of these specified SFTs 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 by calculating the correct tax liability in a feel-good environment, CBDT said.

This would also bring in further transparency and accountability in the tax administration, it added.

Part E of the form would now show different fields such as type of transaction, name of SFT filer, date of transaction, single/joint party transaction, number of parties, amount, mode of payment and remarks etc.

"Furthermore, 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. The new Form 26AS would also have information of transactions which used to be received up to Financial Year 2015-16 in the Annual Information Returns (AIR)," CBDT added.

HostBooks Ltd Founder & Chairman Kapil Rana said, "The intention is pretty clear; one has to be very careful while executing the high-value financial transactions. It should have all the substantive reasons & proofs and need to disclose those in the income tax returns or provide justification for the same when asked by the department."