High-value financial transactions and additional information like foreign remittances, off market transactions, information about purchase of mutual funds among others would be reflected in the Form 26AS.

The Income Tax Department has expanded the scope of information included in Form 26AS in a move to make income tax filing more accurate.

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) has issued an order under Section 285BB of the I-T Act expanding the scope of information reported in the 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.

These would include payment of taxes and demands or refunds and pending/ or completed proceedings undertaken by a taxpayer in a particular financial year that has to be mentioned in income tax returns.

Additional information recommended by CBDT 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.

Additionally, 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 authorized the Director General of Income-tax (Systems) to upload information...in their 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 them.

As per the rules, mutual fund investments exceeding Rs 10 lakh are required to be reported in Form 26AS as per the amended version from last year. Similarly, dividend income has become taxable from FY 2020-21 and tax has to be deducted on it if it exceeds Rs 5,000 in a financial year. Thus, any tax deducted on dividend income in the last year must be reflected in Form 26AS.

“At present, the form 26AS mainly reflects information like TDS, TCS, tax payments, SFT transaction, tax demand, refund, etc. The scope of Form 26AS has been steadily expanded from the last few years and incorporating more information in it will be a beneficial tool for the taxpayers. The updated Form 26AS will allow the taxpayer to self-awareness about the reportable transactions well in advance, and assist them in correct ‘disclosure and income computation’ while filing the return of income. This will also help them in reducing the non-disclosure/ non-reporting penalties,” Om Rajpurohit (Director - Corporate & International Tax), AMRG & Associates, said.

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 authorities. 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.