The implication of the new 26AS Form of Income Tax
Posted on: 12/Jan/2021 12:20:39 PM
Background:
Income Tax Dept 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 dept used to provide u to capture -
(a) TDS deducted from u (For eg: 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 u see your large transactions in a year. And we explain below which transactions.
Q: Tell me which transactions & what do u mean by large transactions (how large?)
Ans: For eg: if you invest in a mutual fund > 10 lacs in a year. That is a large transaction and it will be captured in this statement. Not a single transaction, but cumulative in a year if in a single MF u invest > 10 lacs
Q: Ok I get it; tell me more which all transactions will be included?
Ans: 14 types of transactions 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 u buy bonds > 10 lacs in a year
4) If u buy shares > 10 lacs in a year
5) If u tender shares for buyback > 10 lacs in a year
6) If u buy Fixed Assets > 10 lacs in a year
7) If u buy MFs > 10 lacs in a year
8) Real Estate > 30 lacs
9) Purchase of Bank drafts > 10 lacs with cash
10) If u deposit cash in savings bank account > 10 lacs
11) Cash deposits or withdrawals from current account > 10 lacs and
some other routine ones (related to demonetization)
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 taxpayers, 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 tell IT knows
Q: So does it mean you should do transactions < 10 lacs. For eg: Make a FD < 10 lacs or split it to keep those below 10 lakh?
Ans: First, this is not a single transaction value. Anyways all ur 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 dept harass me now, if I spend too much on credit cards?
Ans: Again, honest tax payers need not worry.
But if someone is not paying any taxes saying negligible income but spends > 10 lacs, IT dept will surely Question him on how he can spend so much Or for eg: 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 Question 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 dept
Q: Where can I check my Form 26AS?
Ans:1) Log in to your account incometaxindiaefiling.gov.in 2) Go to My Account -> View Form 26AS
All previous years are 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 will help you!
Kindly contact your Chartered Accountant for a better understanding of the subject matter and how it affects you.
K Prabhakharan, B Com, BL, FCMA, FCS, MIMA,
Advocate
Former Chief General Manager-Finance &
Company Secretary,
Chennai Metro Rail Limited
Mobile:+91 98410 50051
