The revised version of form 26AS which gives details of the high value transactions made by the tax payer seeks to give more comprehensive information about the assessee including pending as well as completed income tax proceedings and status of income tax demand and refund. Capturing all high value transactions by assessees and including them in form 26AS gives the tax department an opportunity to verify those transactions. This is part of the government’s plan for profiling taxpayers based on risk of revenue leakage to make return processing and assessments more effective.
The Income-tax (11th Amendment) Rules, 2020 notified on Thursday will come into force from 1 June. Form 26AS captures details of transactions above a threshold including savings bank deposits, credit card bill payments and investments in instruments like mutual funds. “This new form 26AS will help both taxpayers as well as tax authorities in assessing a taxpayer's profile and bring better flow of information between taxpayer and the tax authorities," said Rakesh Nangia, Chairman, Nangia Andersen Consulting. With all the information at one place, the tax authorities will be able to verify the details given in the income tax returns and process the return quickly. It will also help them detect discrepancies in the return forms quickly.
The government also on Thursday formally launched a facility for instant allotment of permanent account number PAN. The facility launched by finance minister Nirmala Sitharaman makes PAN allotment paperless, said a statement from the finance ministry. Now, those who possess a valid Aadhaar number and a mobile number registered with Aadhaar can instantly generate a PAN which is needed for many financial transactions.