What Is Form 26AS? – Forbes Advisor INDIA – Forbes

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Published: Sep 7, 2022, 11:00am
Over the past few years, the tax filings in India have become digital and due to the requirement of furnishing a permanent account number (PAN) for any major financial transaction, the tax authorities have access to a lot of information regarding the tax filers. Form 26AS and Annual Information Statement (AIS) are important documents which are made available by the income tax authorities to the tax filers using technology and the information collated from the above. It is important that before furnishing their tax returns, the tax filers review the same and reconcile their financial data to avoid unwarranted notices and tax demands.
Taxpayers initially referred to Form 26AS for reconciling their tax details, especially tax deducted at source (“TDS”) and tax collected at source (“TCS”) credits, etc. However, in order to promote transparency and simplifying the tax return filing process, the Central Board of Direct Taxes (CBDT) expanded the scope of Form 26AS by way of introducing AIS and Taxpayer Information Summary (TIS) to help provide a complete profile of the taxpayer for a particular year. 
Here’s a deep dive into what the Form 26AS, AIS and TIS are and how to use them for filing taxes.
Form 26AS is an Annual Tax Statement, specific to a Permanent Account Number (PAN) furnished in accordance with erstwhile Section 203AA read with second provision to section 206C(5) of the Income Tax Act, 1961 (hereinafter referred to as the ‘IT Act’) and erstwhile Rule 31AB of Income Tax Rules, 1962 (hereinafter referred to as the ‘IT Rules’).
In accordance with the provisions of the IT Act, a person (deductor) who is liable to make payment for certain specified transactions such as salary, interest, commission, rent, fees for professional services and many more, to any other person (deductee) is supposed to deduct tax at source (TDS) and remit the same into the account of the Central Government. Similarly, tax is collected at source (TCS) by the seller (collector) from the buyer (collectee) at the time of selling certain prescribed goods.
In 2012, the Income Tax (IT) Department launched TRACES (TDS Reconciliation, Accounting and Correction Enabling System) to provide an integrated one-stop platform for the stakeholders to facilitate the services related to TDS and TCS operations. The deductee/collectee from whose income tax has been deducted/collected at source would be entitled to get a credit of the amount so deducted/collected on the basis of Form 26AS or the TDS/TCS certificate issued by the deductor/collector. Thus, the TRACES facility provided the taxpayers to view and download their Form 26AS.
It is pertinent to note that with the introduction of AIS vide Section 285BB, Section 203AA and Rule 31AB pertaining to Form 26AS have been withdrawn. However, the said functionality of Form 26AS is still available on the Income tax portal. 
Form 26AS provides the taxpayer with the relevant tax related information such as details of TDS and TCS, details of taxes paid in the form of advance tax and self-assessment tax, details about income tax refunds and demands and other related details. Thus, Form 26AS provides evidence of proof of payment of taxes either in the form of TDS/TCS deposited with the government on behalf of the taxpayer or self-assessment and advance taxes paid by the taxpayer himself. Form 26AS is commonly known as a Tax Credit Form as it provides consolidated details of all the Tax Credits that can be claimed by an assessee during a particular financial year. 
This aids an assessee to appropriately file his Income Tax Return (ITR), avail all the credits that he is entitled to, pay only the difference (if any) as self assessment tax and avoid any omissions and errors which may otherwise lead to filing a defective return. 
Apart from the same, Form 26AS also provides certain details such Interest on refund, Demand outstanding, Specified Financial Transactions (SFT) details, TDS on immovable property, etc.
Certain issues are being faced by the taxpayers with respect to their Form 26AS such as:
The aforementioned issues can arise due to several reasons such as incorrect furnishing of PAN, failure to deduct/deposit TDS by the deductor, error in amount of TDS, omissions/delay in filing TDS return, error in Challan Identification Number (CIN), etc. 
In such a case, the taxpayer must communicate the same to the TDS deductor and obtain a clarification from him. In case the deductor refrains from resolving the issue, taxpayers have an option to file a grievance on the e-filing portal with supporting documents and seek redressal. 
Further, it is advisable to resolve the errors in Form 26AS and get them revised prior to furnishing the ITR so as to avoid problems in the future and be answerable to the IT department.
Form 26AS all in all has 10 parts as detailed underneath and in case of any issue with any part, the following mentioned persons should be co-ordinated:
The CBDT vide press release dated November 1, 2021 rolled out two new statements viz. AIS and TIS in order to assist the tax filers file their returns of income.
AIS is a comprehensive statement which reports all the information that is covered in Form 26AS along with some additional details which are not provided in Form 26AS. The objectives of AIS as stated in the AIS Handbook released by the IT Department on their web portal are:
AIS covers significant details of the financial transactions undertaken by a taxpayer during a particular financial year. It includes additional information relating to interest, dividend, securities transactions, mutual fund transactions, foreign remittance information etc.
The information detailed in the AIS is bifurcated into two parts which are as under:
This part details the general information of a taxpayer such as name of the taxpayer, date of birth/incorporation/formation, address of taxpayer, PAN, masked Aadhar number, mobile number, e-mail address, etc. 
Part B consists of the details of financial transactions of the assessee. The same is broadly bifurcated under the following heads:
AIS is an advanced version of Form 26AS as it contains all the details that are there in Form 26AS and also the details of some additional financial transactions. Again, AIS is a form that helps an assessee to file his income tax return appropriately. 
It is notable that there is an option to provide feedback on the AIS portal either online or through offline utility, the chances of falling under litigation are reduced if the feedback provided by the assessee is supported with valid explanations. Also, the reported information is being processed to remove duplicate information. 
Although AIS has recently been introduced by the Income Tax Authorities and has proved to be a better information facilitator than Form 26AS, there are still several loopholes which need to be covered up. Following mentioned are few instances of areas where the department should look into:
The taxpayer will be able to view AIS information and submit following types of response on the information:
The feedback provided by assessee will be captured in the AIS and reported value and modified value (i.e. value after feedback) will be shown separately.
Also, the feedback provided by assessee will be considered to update the derived value (value derived after considering the taxpayer feedback) in TIS. Further, information assigned to other PAN/Year in AIS will be processed and information will be shown in the AIS of the taxpayer using automated rules.
Thus, the updated AIS would show both reported value and modified value under each section. Taxpayers can download AIS information in PDF, JSON, CSV formats and provide the feedback either on the Income tax portal or through JSON utility.
The TIS is a summarised and concise version of AIS wherein, category wise aggregated information summary is presented to a taxpayer. It shows processed value (i.e. value generated after consolidation of information based on predefined rules) and derived value (i.e. value derived after considering the taxpayer feedback and processed value) under each information category (e.g. salaries, interest, dividend etc.). The derived information in the TIS will be used for prefilling the return, if applicable.
As the name signifies, TIS is a summarized statement which enables a taxpayer to quickly glance through the total value of transactions at one place. TIS does not show transaction by transaction details and hence is less bulky, much simpler and easy to understand for a reader. Apart from this, it shows both the processed and the derived value which cross verifies the amount of transaction and facilitates reconciliation if there is any variation.
The TIS is a summary of transactions already appearing in AIS and thus does not provide any add-on benefit to the stakeholders, except that it is a summarized version of the transactions. Also, it leads to duplicity of information which might lead to confusion if the data is not populated appropriately. 
Further, in case of discrepancy in the amount, a taxpayer will always refer to AIS instead of TIS as it does not provide transaction by transaction details and thus, in our opinion, TIS does not add much utility except providing a summarised statement of details of the transaction to the taxpayer. 
According to the income tax FAQs on AIS, “AIS is the extension of Form 26AS. Form 26AS displays details of property purchases, high-value investments, and TDS/TCS transactions carried out during the financial year. 
AIS additionally includes savings account interest, dividend, rent received, purchase and sale transactions of securities/immovable properties, foreign remittances, interest on deposits, GST turnover etc. 
AIS also provides the taxpayer the option to give feedback on the transactions reported. Further, the aggregation of transactions on information source level is also reported in TIS.”
As TIS is a summary statement extracted out of AIS, the details shown are similar to what AIS presents. A comparative chart depicting transactions appearing in Form 26AS, AIS and TIS is tabulated as under:
The AIS has added details of many useful financial transactions, which were not available in Form 26AS with an aim to provide the taxpayers with an exhaustive statement covering the majority of the transactions. Apart from certain loopholes reported by the stakeholders in AIS, this statement has increased financial transparency, reduced non-reporting / misreporting and would help in reducing litigation to a great extent. 
Many experts are of the view that soon AIS will replace Form 26AS as most of the details are exhaustively covered in AIS as compared to Form 26AS. However, it would be advisable to do so only after the current issues faced by taxpayers in AIS are addressed. 


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