Income Tax: Form 26AS info list to include foreign remittances, mutual funds

October 28, 2021
CA Chandan Agarwal's Office

Central Board of Direct Taxes has expanded the scope of information reported in new Form 26AS
Prescribed additional information includes foreign remittance, salary breakup, interest on Income Tax Refund, and more

Income Tax Department has expanded scope information included in Form 26AS to include more high-value financial transactions and additional information. As per the rules reformed by the taxman, the Form 26AS will include details of mutual fund (MF) purchases, foreign remittances, as well as information in income tax returns of other taxpayers.

Form 26AS is an annual consolidated tax statement that taxpayers can access from the Income Tax Department website using their Permanent Account Number (PAN). The decision to add more information to the document is likely to facilitate faceless assessments.

The Central Board of Direct Taxes (CBDT) on October 26 issued an order under Section 285BB of the I-T Act expanding the scope of information reported in new Form 26AS.

The Section 285BB was added to the Income-tax Act in Union Budget 2020-21, to revamp Form 26AS to an ‘Annual Information Statement’, which apart from TDS/ TCS details, would contain comprehensive information of 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 income tax returns.

Following that, in May last year, the Income Tax Department had notified the revised Form 26AS, including information on high-value financial transactions undertaken during a financial year, a move which also facilitated voluntary compliance and ease of e-filing of income tax returns.

With this October 26 order, the list of details to be available in Form 26AS has been expanded further.

Additional information recommended by the direct tax authority includes foreign remittance made by any person through an authorised dealer, breakup of the salary with deductions claimed by the employee, information in ITR of other taxpayers, interest on Income Tax Refund, information published in Statement of Financial Transactions.

Also, off market transactions reported by depository/ registrar and transfer agent, information about dividend of mutual fund reported by RTA, and information about purchase of mutual fund reported by RTA too would be included in Form 26AS.

The CBDT has authorised “Director General of Income-tax (Systems) to upload information…in her/his possession, in the Annual Information Statement in Form 26AS in the electronic filing account registered by the assessee in designated portal, within three months from the end of the month in which the information is received by her/him.”

Following the development, AMRG & Associates (Director – Direct & International Tax) Om Rajpurohit told news agency PTI that the additional information to be loaded on the Annual Information Statement in Form 26AS would promote ease of faceless digital assessments.

“Even though additional tax contributions from taxpayer’s would be insignificant, cumulative effect would be noteworthy. This change will push all the taxpayers towards a precise and accurate self-declaration of income earned,” Rajpurohit stated.

Nangia & Co LLP Partner Shailesh Kumar said the new Form 26AS will now have details about foreign remittances made by taxpayer, as reported by Authorized Dealer in Form 15CC, more comprehensive details about allowances, deductions claimed by taxpayers in respect of their salary income as reported to the employer.

“This new reporting in Form 26AS will help both taxpayers as well as tax authorities in assessing a taxpayer’s profile and bring better flow of information between taxpayer and the tax authorities,” Kumar said.

“With all the information/ details available at one place, it will also assist tax authorities doing e-assessment and having no/ limited interaction with taxpayers, as tax authorities will be able to easily compare information available in Form 26AS vis-á-vis information reported by taxpayer in ITR and any mismatch may be easily flagged by the systems to tax authoritiess,” he further added.

It will also assist the taxpayers to identify and take corrective action, in case any incorrect information/ detail is reported in Form 26AS, he added.

While revamping Form 26AS, CBDT had last year said the I-T 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 since FY2016 onwards.

Now, all such information under different statement of financial transactions (SFTs) will be shown in the new Form 26AS.

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.

Part E of the form also shows 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.

AKM Global, Director-Tax and Regulatory, Sandeep Sehgal said over the last few years, Form 26AS has been getting more comprehensive in terms of the information available for a taxpayer about the taxes withheld and other financial information. As per the latest order, additional details would be collated from various sources and would be available.

“The idea seems to make this a go-to-document for the taxpayers to have almost everything at one place from basic tax deductions to other important details so that the compliance requirements can be met in a hassle-free manner,” Sehgal added.

Source: https://www.livemint.com/news/india/income-tax-form-26as-info-list-to-include-foreign-remittances-mutual-funds-11635332518134.html

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Income Tax: Form 26AS info list to include foreign remittances, mutual funds

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