On Saturday 18th July 2020, an official statement of the ministry of finance said that “from this assessment year, taxpayers will see an improved Form 26AS that would contain some additional details on taxpayers’ financial transactions as specified in the Statement of Financial Transaction (STFs).”
The new form has been introduced to ensure that taxpayers will no longer forget to mention major financial transactions such as cash deposits/cash withdrawals, investments in equities and mutual funds, buyback of shares, credit card payments, and property transactions in their annual income tax returns (ITRs).
The statement of the ministry said that “earlier Form 26AS used to give information regarding TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) relating to a PAN, besides certain additional information including details of other taxes paid, refunds and TDS defaults. But now, it will have SFTs to help the taxpayers recall all their major financial transactions so that they have a ready reckoner to enable them while filing the Income Tax Return (ITRs).”
Form 26AS is an auto-generated financial statement that includes taxation-related information, including details of high-value transactions.
In also addition, the ministry said in the statement that “the new form 26AS is faceless hand-holding of the taxpayers to e-file their ITR quickly and correctly.”
The ministry of finance also added in the statement that “the information being received by the Income Tax Department from the filers of these specified SFTs is now being shown in Part E of Form 26AS to facilitate voluntary compliance, tax accountability and ease of e-filing of returns so that the same can be used by the taxpayers to file their ITR by calculating the correct tax liability in a feel-good environment.”
To implement this, the Budget 2020-21 had introduced a new Section 285BB in the Income Tax Act.
The CBDT (Central Board of Direct Taxes) in May, had informed that the revised Form 26AS will be effective from June 1, 2020.