Form 26AS in its new Aatmanirbhar Avtar

In the words of George Bernard Shaw ‘Progress is impossible without change, And those who cannot change their minds, cannot change anything’.

I believe this was the only thing in mind on the Government while introducing the new Form 26AS or rather the Annual Information Statement in such a comprehensive manner. Form 26AS is an Annual Consolidated Statement reflecting the taxes paid (including Self-Assessment Tax and Advance Tax) and deducted during the year along with details of refund.

However, Budget 2020-21 introduced section 285BB in the Income-Tax Act to implement revised Form 26AS and include all information concerning taxpayer with the Income Tax during the year (Making it a ONE STOP). Section 285BB reads as under:-

‘The prescribed income-tax authority or the person authorised by such authority shall upload in the registered account of the assessee an annual information statement in such form and manner, within such time and along with such information, which is in the possession of an income-tax authority, as may be prescribed.

Explanation–For the purposes of this section, “registered account” means the electronic filing account registered by the assessee in designated portal, that is, the web portal designated as such by the prescribed income-tax authority or the person authorised by such authority.’

In view of the newly notified section, CBDT vide Notification No. 30/2020 dated 28.05.2020 implemented new Form 26AS by inserting new Rule 114-I (and omitting Rule 31AB) which shall be effective from 01.06.2020. Form 26AS will thus, now be a complete profile of the taxpayer. The major features of the newly brought Form includes-

• Like earlier, the new Form 26AS shall continue to reflect all information relating to tax deducted and tax collected, payment of taxes and refund.
• In addition to the above, the new Form 26AS now shall also reflect information about income tax demand, pending and completed tax proceedings including assessment and
  reassessment proceedings, revision and any appeal related information.
• Information in respect of Specified Financial Transactions shall also be included. Section 285BA requires transactions of purchase/ sale of goods, property, services, works contract, investment, expenditure, taking or accepting any loan or deposits to be submitted in Form 61A/B by specified persons including prescribed reporting financial
  institution. The same shall also be shared in the new Form 26AS.
• Also, as per the newly inserted sub-rule (2) of Rule 114-I of the Income Tax Rules, CBDT shall authorise Director General (Systems) or any other officer, to upload in this form any information received from any other officer or authority under any law which shall include any adverse action initiated or taken or found or order passed under
  other laws such as GST, Benami Law, Custom, etc.
• It shall also provide information received by the Tax Department from any other country under the treaty covered u/s 90/90A.
• Personal information of the assesse including Mobile No., Email ID and Aadhar shall also be available in the new Form.
• The Form shall be updated regularly within 3 months from the end of the month in which any information is received and hence the same shall provide all the latest
  information.

Thus, the Form 26AS in its new Avatar shall portray the complete contour of the taxpayer which will benefit the tax authorities for the following reasons:-

• It shall provide a better and reliable source of information to the tax authorities helping them in assessing the assessee’s profile.
• It shall help them while doing E-Assessments wherein there would be no/limited interaction with the assessee.
• It shall help them to compare information available in Form 26AS with that furnished by the assessee in the ITR.  Mismatch, if any, can easily be identified by their systems.
• The tax authorities shall have access to information about the assesse under other laws like GST and customs as well thus including information of its import, export, turnover,
  etc.
• It shall provide information to the authorities about their income or assets located outside India.

So the inference that we draw here is that, the tax payer will have to provide for correct and complete information at all times to the banks or financial institutions or any other authority about any demand or proceedings under any law, since the thing they will ask now – is your Form 26AS so as to be sure while performing due diligence or any background checks. The Government bringing in more transparency of the profile of taxpayer, it shall be tough for him to conceal or provide any incorrect information.

In case of any query/ clarification, please feel free to reach me out at sonakshiagarwalca@gmail.com