Introduction:
A lot of financial transactions are undertaken by us during the financial year. In these transactions either our Permanent Account Number (PAN) or Aadhar number is submitted, whereas after the financial year gets completed we need to pay income Tax at the applicable rate on the income earned by us during the year by considering above financial transactions.
Page Contents
- Which things are to be kept in mind while filing the Income Tax Return?
- Before 1st November, 2021 – Form 26AS:
- After 1st November, 2021 – AIS – Annual Information Statement (New Form 26AS)
- Details in AIS :
- Which transactions are included in AIS ?
- Benefits of New AIS form.
- Difference between AIS and Form 26AS:
- Will form 26AS be abolished?
- What if you have filed your Income Tax Return for F.Y 20-21?
- From where to check AIS ?
- What are the peculiarities of new form AIS?
Which things are to be kept in mind while filing the Income Tax Return?
Generally you have to give details of income from various sources earned by you during the financial year to your consultant / Chartered Accountant so that they can compute your correct Income and tax thereon on the basis of correct information.
Else if you are filing Income Tax Return by yourself you need to keep handy certain documents to file ITR and consider the following things:
1. If you are a salaried employee, then you need to collect and check Form 16 from your employer which contains the details of total salary earned during the year, allowable deductions, allowances, perquisites , TDS and your tax liability/Refund.
2. If you have given your house or office on rent during the year then the rent agreement with tenant is to be considered, also if you have taken any housing loan then the repayment schedule as well as Interest Certificate showing details of interest paid.
3. If you are engaged in business or profession then the profit and loss account, balance sheet, capital account, etc. all business related documents to be considered.If you are not required to maintain books of accounts as per law, the details of Gross Receipts, Turnover, Expenses and Estimated Profit/Loss.
4. If during the year you have purchased or sold any shares or units of mutual funds or any land, building or property is sold then the proofs and legal documents for the same has to be considered while filing ITR.
5. Details of interest, dividend, etc. received on investments.
6. Certain investments or expenses incurred which are available as deductions under section 80C of the Income Tax act, against the Incomes earned, For example: Public Provident Find (PPF), Insurance Premium, Tuition fees, Equity Linked Savings Scheme (ELSS) ,National Savings Certificate (NSC), etc.
7. Details of mediclaim expense incurred during the financial year for self, spouse, children and parents.
8. Details of donations given during the financial year to recognised trusts or institutions.
9. Bank statements and passbooks of all bank accounts.
The above mentioned points are not exhaustive, there are much more things which needs to be considered while filing Income Tax Returns . According to the complexities of transactions many things has to be considered but among the most important document required in recent time is form 26AS which is also called “Tax-book” just like passbook.
Before 1st November, 2021 – Form 26AS:
The Income Tax department furnishes a statement containing details of tax deducted at source (TDS) or Tax collected at source (TCS) , the advance tax paid by you, the refund received by you, etc. on Income Tax Traces Portal which is known as Form 26AS.
This statement is considered as the most important statement. One should not file Income Tax Return without considering Form 26AS.
After 1st November, 2021 – AIS – Annual Information Statement (New Form 26AS)
We may miss certain financial transactions while filing Income Tax Returns like Interest on Savings Account, Capital Gain on sale of shares & Securities, Dividend, etc. Government used to get information / details about these transactions from various parties.
The government is insisting on implementing pre-filled ITR , that means the information with respect to income earned by you will be available to the government directly from “Third Parties”. So that you do not miss out this information while filing your Income Tax Return.
Income tax department will now get all details from “Third parties” with respect to your transaction in shares, mutual funds, Salary earned by you, Interest income earned by you from Savings bank, Fixed deposits, dividend income, details of property sold or purchased by you, rent income received by you, Off market transactions ( transactions between 2 demat accounts), details of foreign remittances, etc. during the financial year.
Details in AIS :
With effect from 14th November 2021, the below mentioned details will be reflected in AIS for the financial year 20-21:
1. Information relating to TDS/TCS
2. Information relating to Specified Financial Transactions – SFT
3. Information relating to Payment of Taxes
4. Information relating to Demand & Refund
5. Information relating to Pending proceedings
6. Information relating to Completed proceedings
Which transactions are included in AIS ?
1. Salary Income
2. Rent Income on house property
3. Dividend Income
4. Interest Income on Savings Bank
5. Interest Income on Term/Fixed Deposits
6. Interest on Income Tax Refund
7. Rent received on Plant & Machinery
8. Interest on Bonds / Government Securities
9. Amount received from Life Insurance Policy
10. Sale of Land or building
11. Purchase or Sale of vehicles
12. Purchase / Sell of shares or mutual fund units
13. Off-Market transactions
14. Business Receipts
15. Repayment of Rent
16. Cash Withdrawal and deposits
17. Receipts/ Repayment of foreign exchange
18. Foreign travel
19. Debit/ Credit Card, etc.
Benefits of New AIS form.
- In future you will get your pre-filled Income Tax return as a base to file ITR.
- If you do not agree with the details reflecting in AIS then you can also submit “ Online feedback” for the same.
- AIS reflects details of financial transactions undertaken by you during the financial year, hence by disclosing the applicable details in your Income tax return you can be saved from interests, penalties and Income Tax litigations in future.
- AIS is divided into 2 parts:
- Tax-Payer Information Statement (TIS)
- Annual Information Statement (AIS)
TIS is a summary of all details for ease of filing Income Tax Return.
Difference between AIS and Form 26AS:
The Income Tax Department collects various information from third parties with respect to the financial transactions undertaken by us during the financial year which we are able to check by downloading Form 26AS.
Till date the scope of 26AS is limited to the details with respect to TDS , TCS, advance tax, Self-assessment tax, etc.
However AIS will also contain details of transactions undertaken by us in share market – sale purchase of securities, mutual funds, dividend income, interest income, Purchase sale of Property, etc.
Will form 26AS be abolished?
As notified by the Income Tax department, Form 26AS will be available to taxpayers on the website and will be in function till the AIS is completely implemented and starts functioning in full.
In long term AIS will be the base for filing the Income Tax Return.
What if you have filed your Income Tax Return for F.Y 20-21?
On 1st November, 2021, the Income Tax department came with a press release, after that the Annual Information Statement started being reflected on the Income Tax Portal.
As per the said press release, the details being reflected in the AIS should be taken into consideration while filing your Income Tax Return and in case of any disagreement or modifications in details therein “Online feedback” should be given.
Many times, while filing ITR the interest income from savings bank account, dividend income, Profits on sale of Shares or Mutual funds, etc. are left out to be disclosed.
So, if you have filed your ITR you should specially check your AIS for F.Y 20-21 and if some details are reflecting there but not disclosed in ITR you should file “Revised Income Tax Return”.
From where to check AIS ?
Tax payer can check the AIS by login into the Income Tax portal from the website – www.incometaxindia.gov.in using user id and password.
AIS form can be downloaded in PDF form also and it will be password protected, to unlock the same you need to insert your PAN (in capital letters ) and date of birth (in ddmmyyyy format)(no space in between).
What are the peculiarities of new form AIS?
1. Details of interest, dividend, Share transactions, transactions in foreign currency, etc. all at one place.
2. A summary of all above mentioned transactions called “ Tax payer Information Summary (TIS)” is available.
3. A base for “Pre-filled Income Tax Return” in future.
4. The mistakes can be rectified by giving feedback in AIS.
5. AIS can be downloaded.
6. Check AIS compulsorily before filing Income tax return and if you find any mistakes,duplication then submit feedback and rectify it.If you don’t submit feedback then you may receive notices from department in future asking clarification regarding mismatch of your details of AIS and your filed Income tax returns
Through “ Project Insight” the government with an intention to :
1. Bring awareness among the people to follow the income tax laws so that they are strictly followed.
2. People get confidence that everyone is paying income tax applicable to them.
3. As a part of collecting income tax in a very transparent manner, has brought the concept of AIS.
We believe that the people should follow this campaign initiated by government in right manner so that in future the possibilities to face litigations in form of additional tax liabilities, penalties, interests, notices , etc. decrease.
Taking into consideration all the financial transactions undertaken by you during a financial year and by comparing the same with AIS, one should file Income Tax return with the due date specified and pay the applicable taxes and contribute to the development of the country.
Author Bio
The biggest disadvantage of AIS is that t is ANNUAL and getting all details checked takes time. Enough time is not given to Assessees after availability of AIS. In 26AS atleast we could check quarterly.
I suggest that if AIS to be available by 15th June, then assessees need time upto 31 August atleast