Income Tax Return Filing: Filing ITR? Make sure to check your latest Form 26AS!!!!

Form 26AS (Annual Tax Statement) is an essential document for taxpayers containing details of all the taxes tagged against a taxpayer’s PAN and serves as an important reference while filing income tax returns (ITR).

To usher in enhanced transparency between tax authorities and taxpayers, the Finance Act, 2020 introduced changes to the existing Form 26AS and mandated certain additional information to be included in the new Form 26AS.
The improved Form 26AS includes information on certain cash transactions, investment in shares, bonds or mutual funds, credit card bills, purchase of foreign currency and purchase/ sale of immovable property.

The updated Form 26AS will consist of the below mentioned information, in addition to the details (such as PAN, address, details of TDS, details of tax collected at source, details of taxes paid during the year) which were already available:

      Ø   Personal details such as, date of birth/ incorporation, mobile number, address, e-mail id

Ø  SFTs such as donations, forex transactions, acquisition of shares from companies, buy back of shares

Ø  Tax demands

Ø  Details of pending and completed assessment proceedings

Ø  Details of information received from foreign jurisdictions under Exchange of Information (EOI) clause of tax treaties.

Better to disclose SFT (Statement of Financial Transactions) while filing ITR:

The changes in Form 26AS would serve dual purpose as honest taxpayers would be enabled to file accurate ITR with the help of updated information on their financial transactions and it would discourage those who conceal information about specified financial transactions.

For example, a person earning foreign income and qualifying as tax resident in India is required to file his ITR, disclosing his foreign income and assets and should therefore file his ITR appropriately by disclosing the income and assets which are required to be reported in India.

As the tax return filing deadline for FY 2019-20 approaches, taxpayers should download their latest Form 26AS, reconcile the numbers and remit tax due (if any), before filing ITR.