Hidden features in new 26AS Form under Income Tax

26AS Form in new format under I-Tax Rule 114-I have been notified wef 1.6.2020. Please note all the information in it is auto populated and earlier it was mainly providing information wrt Tax (TDS, TCS, Advance Tax etc) alongwith Gross Income only. But now new 26AS form shall be a complete profile of taxpayer’s financial transactions and be named as CIBIL-Finance. It shall be a ready reckoner for banks, financial institutions, or any other body while carrying out due diligence of the taxpayer. 26AS or CIBIL-Finance is having the following new features:-

1. It shall contain details of specified financial transactions which include transactions of purchase/ sale of goods, property, services, works contract, investment, expenditure, taking or accepting any loan or deposits, share trading details, donations eligible u/s 80G etc

2. An enabling provision has been notified to upload information received from any other officer, an authority under any law (Extra Ordinary provision)

Effect of these 2 provision specifically.

2.1 This will help to know any adverse action initiated or taken under any other law such as custom, GST, Benami Law, etc against taxpayer at one place to all stakeholders.

2.2 It will also provide information received from any other country under treaty/exchange of information about income or assets of the taxpayer located outside India.

2.3 The tax related information shall be live and updated maximum within 90 days from the end of month.

2.4 This form will now make it difficult for the taxpayer to hide information from any bank/financial institution about any proceedings against him.

2.5 In IBC 2016 proceedings, it may also help in detecting preferential, undervalued & Extortionate transactions of Corporate/Director for which many a times information was sought from Tax authorities which was too difficult to get.

2.6 It has been seen in the past that due to wrong entry of PAN/TAN no by deductor, TDS and Gross Income get reflected in the wrong taxpayer’s account and on non declaration of the same in ITR, the same was added during cpc processing or scrutiny proceedings. Hopefully similar situation shall not arise for information received from any other officer, an authority under any law.

3. Information therein shall be pre-filled in ITR and hence reduce burden in ITR Filling.

4. New provision of mobile number, email id, and Aadhar no of the taxpayer is also there.

5. Income tax demand, refund, proceedings pending, and completed will also be shared with the taxpayer

In nut shell, new Form 26AS shall act as Financial CIBIL of taxpayer and provide information at one place and make the task of I-Tax Officers or other Government authorities very easy as all the information not only related to I-Tax but also for other laws, foreign assets/income shall be available at one place. Earlier such information was available to I-Tax authorities only to a very limited extend mainly against the AIR filling by Banks, MCA Portal, Authority Office or questions asked during I-Tax proceedings only. In Indian context where parallel economy still constitutes a significant proportion, this form shall give vital information to Government authorities at one place. It may prompt I-Tax authorities to make additions u/s 68 or 69 or 69B read with 115BBE as has been done for cash deposited during de-monetization time in the years to come. We professional must guide our clients in advance of the vitalness of auto-populated information in 26AS/ Financial CIBIL wef 1.6.20

Author Detail E-Mail:- anandmanoja@gmail.com Phone no: – 9811280787

Manoj Kumar Anand is Delhi based Chartered Accountant and Insolvency Professional and involved in around 14 assignments as IRP/RP/Liquidator/Process Advisor under IBC 2016. He has co-authored a book on Valuation also and is founder President of `AIIPA’ an association of Insolvency Professional.