New Form 26AS makes ITR filing easy for taxpayers. All you need to know

New Delhi: For many taxpayers annual filing of income tax return (ITR) is the most tedious task as it requires collating information of all investments made in the financial year, collecting housing loan interest certificate etc. However, from this year onwards, the ITR filing process is going to be much easier and smooth as the new Form 26AS will have most of the information needed to file the ITR.
From the current assessment year (AY), the new Form 26AS will include the Statement of Financial Transactions (SFTs) on the taxpayers’ financial transactions as specified, which would help taxpayers to complete the ITR process quickly and correctly.
The older Form 26AS used to have information regarding tax deducted at source (TDS), tax collected at source (TCS) and certain additional information like details of refunds and TDS defaults earlier, other taxes paid. But the new Form 26AS along with the above information will have SFTs, which will remind the taxpayers about all his major financial transactions during the previous financial year.
Worth mentioning here is that from the financial year 2016 onwards the Income Tax Department under Section 285BA of Income-tax Act, 1961, receives information on high-value transactions like sale/purchase of immovable property, cash deposit/withdrawal from saving bank accounts, time deposits, purchase of shares, foreign currency, mutual funds, buyback of shares, credit card payments, cash payment for goods and services, etc with regard to individuals from various entities known as “specified persons” like banks, mutual funds, institutions issuing bonds and registrars or sub-registrars etc.
This information is mentioned in Part E of the new Form 26AS. Tax experts say this information would empower taxpayers in maintaining voluntary compliance and tax accountability. Further, this information would ease the process of e-filing of returns as you can calculate the correct tax liability using the data available in the Form 26AS. For example, for calculating long term capital gain from mutual fund a taxpayer used to collect transaction statements from all the AMCs and from those statements he used to calculate both short- and long-term capital gain liability. But in this process, the taxpayer is liable to commit mistake if he misses transactions from anyone AMC. But in the new Form 26AS, you get all the transaction data from different AMCs in one place. Hence, the chances of error are minimised.
Part E of Form 26AS will contain information like type of transaction, name of SFT filer, date of transaction, number of parties, single/joint party transaction, amount, mode of payment and remarks etc. This would help taxpayers in filing their return of income with updated financial transactions. But those who conceal various financial transactions such as information on share purchase, property purchase to the I-T Department will find it difficult to do so now.