New comprehensive I-T form to come in handy for taxman

Tax authorities will now have information regarding taxpayers' transactions in stocks and property, along with other financial transactions, in any given year after the Central Board of Direct Taxes (CBDT) notified the new form 26AS — an annual information statement — on Thursday.

Tax authorities will now have information regarding taxpayers’ transactions in stocks and property, along with other financial transactions, in any given year after the Central Board of Direct Taxes (CBDT) notified the new form 26AS — an annual information statement — on Thursday.

Details in the new document will include taxes paid by a taxpayer, details of pending as well as completed income tax proceedings, status of income tax demand and refund along with details of specified financial transactions undertaken by taxpayer during a particular financial year.

“With all the information/ details available at one place, it will assist tax authorities in e-assessment with none or limited interaction with taxpayers, as tax authorities will be able to easily compare information available in Form 26AS vis-a-vis information reported by taxpayer in income-tax return (ITR). Any mismatch may be easily flagged by the systems to tax authorities,” Rakesh Nangia, chairman, Nangia Andersen Consulting, said.

The comprehensive taxpayer’s profile will also provide auto-populated information in the ITR, which is currently restricted to some information like tax deducted at source, while a taxpayer has to manually fill in other information related to, say, capital gains.

Sandeep Sehgal, director — taxes and regulatory, AKM Global, said: “Some details would certainly get pre-filled, but details like tax liability on capital gains are prone to complications.”

Similarly, any improvement into any property is also eligible as deduction for calculation of capital gains for which details would not be available. Also, some transaction cost are eligible to get reduced from sale consideration, such as brokerage, etc. Hence, taxpayers would need to verify the information available in 26AS vis-a-vis the actual value of transactions carried out by them, Sehgal said.

The new form will ensure that transactions are duly considered and reflected in the ITR. In case there is a transaction, which appears in 26AS but is not reported in ITR, taxpayer may be asked to explain the reason, another tax expert said.