Form 26AS to be replace by ‘Annual Information Statement’ | Mint – Livemint

How to
  • Form 26AS is an annual consolidated credit statement issued by the I-T department
  • AIS will have details of shares and mutual fund transactions conducted by taxpayers

Annual Information Statement will also have details of shares and MF transactions conducted by taxpayers
To curb tax evasion and promote transparency, the Finance Minister in Budget 2020 proposed to replace Form 26AS with a new Annual Information Statement (AIS).
Form 26AS is an annual consolidated credit statement issued by the income tax department under Section 203AA of Income-tax Act, 1961. Besides information that 26AS provides, the new AIS will also have details of shares and mutual fund transactions conducted by taxpayers during the relevant assessment year. Section 203AA will get replaced by a new Section 285BB, which will facilitate AIS.
“The erstwhile Form 26AS was prescribed to contain and provide information regarding taxes paid by or tax deducted at source (TDS) on behalf of a taxpayer, which could be used both by the taxpayer as well as the tax authorities. With an objective to make the statement more detailed and comprehensive, it is now proposed to replace Form 26AS with a new AIS for a taxpayer. In addition to details of taxes paid or TDS, AIS will also contain details of other important financial transactions undertaken by the taxpayer such as sale or purchase of immovable property and share transactions,” said Shailesh Kumar, director, Nangia Andersen consulting, a business tax advisory firm.
Under Section 285BA, “specified persons” are required to record and report high-value financial transactions of individuals through an annual information report (AIR). These specified persons include banks, mutual funds, institutions issuing bonds and registrars or sub-registrars; these specified persons have to file the AIR containing details of high-value transactions. The list of high-value transactions, for which AIRs have to be filed, is specified in Rule 114E of the Income-tax Rules, 1962.
For instance, a bank has to file an AIR when the aggregate cash deposits of all the savings bank accounts of a client exceed 10 lakh in a year. Similarly, registrars or sub-registrars have to file AIRs for every individual involved in any transaction of an immovable property (land, house or building), where the value of the deal exceeds 30 lakh. In case a deal involves joint parties, and the share of one or more parties is less than 30 lakh, AIRs are filed for all the individuals. The transaction amount is the total amount reported by the AIR filer. It does not reflect the respective share of each individual in a joint-party transaction.
However, the format of the new AS is yet to be notified. “It will be interesting to see what and how much information is sought to be covered in such a statement. It is expected to increase the exchange of information and transparency between the taxpayers and tax authorities. This statement is also expected to widen the tax base and discourage taxpayers to conceal information about their financial transactions with the tax authorities,” said Kumar.
AIRs filed by a specified person help the government collect information and cross-check the income declared and tax paid by the income tax assessee in her income tax return.
Download the Mint app and read premium stories
Log in to our website to save your bookmarks. It’ll just take a moment.
You are just one step away from creating your watchlist!
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
Your session has expired, please login again.
You are now subscribed to our newsletters. In case you can’t find any email from our side, please check the spam folder.
This is a subscriber only feature Subscribe Now to get daily updates on WhatsApp

source

Leave a Reply

Your email address will not be published.