Webcast by PM Modi Dated 13th August 2020
Hon’ble Prime Minister Narendra Modi on August 13, 2020, launched the “Transparent Taxation” platform while announcing multiple reforms to improve Tax compliance, faceless assessment, and ease of filing returns. As part of rehaul, the government has also proposed to reduce the threshold of the various transactions for tax disclosure. This is aimed at widening the income tax base and checking tax evasion.
New Form 26AS to show Specified Financial Transactions (SFT) in Part E
New Form 26AS will also reflect following payments along with SFT transactions:-
|Sr. No.||Particulars||Reporting Limit|
|1||White Goods (Mean appliances like AC, Refrigerator, etc.)||Rs.1,00,000/- p.a.|
|2||School Fees||Rs.1,00,000/- p.a.|
|3||Hotel Bills Payment||Rs.20,000/- p.a.|
|4||Property Tax Payment||Rs.20,000/- p.a.|
|5||Medical Insurance Premium||Rs.20,000/- p.a.|
|6||Life Insurance Premium||Rs.50,000/- p.a.|
Note:- The corresponding changes which are required to made in Income Tax to put forward a mechanism for collection of this data are not made and all such changes are yet to be notified.
Press Release Dated 18th July 2020
The income-tax department had issued a press release dated 18th July 2020, to inform that Part E of the Form 26AS will be showing Specified Financial Transaction (SFT) from ”specified persons” like institutions issuing bonds, banks, mutual funds, and registrars or sub-registrars, etc., under section 285BA of the income tax act, 1961.
What are the objectives of New Form 26AS?
To File Income Tax Return Correctly And Smoothly
The objective of improving the Form 26AS is to enable a taxpayer to file his income tax return correctly and smoothly without missing any financial transaction carried out by the taxpayer during a financial year. The new Form 26AS will act as a ready reckoner for the taxpayer during a financial year. This will help the taxpayer in computing his total income correctly and consequently, the tax liability.
Faceless Hand-Holding Of The Taxpayer
The new Form 26AS is the faceless hand-holding of the taxpayer to e-file their ITR’s quickly and correctly. It is further explained that the department used to receive information like cash deposit/withdrawal from saving bank accounts, sale purchase of immovable property, time deposits, credit cards payments, purchase of shares, debentures, foreign currency, mutual funds, buyback of shares, cash payments of goods & service, etc. under section 285BA of the income-tax act, 1961 from specified persons as stated above.
Transparency and Accountability
It is stated that information was being received by Income Tax Department from the filers of these ‘‘specified SFT’s is now being shown in Part E of Form 26AS” to facilitate voluntary compliance, tax accountability and ease of e-filling of returns so that the same can be used by the taxpayer to file her or his income tax return (ITR) by calculating the correct tax liability. This would also bring in further transparency and accountability in the tax administration.
What information Form 26AS is providing from earlier?
The earlier Form 26AS used to give information regarding tax deducted at sources and tax collected at source relating to a PAN, besides certain additional information including details of other taxes paid, refunds, and TDS defaults.
From which year Form 26AS will be updated?
The new Form 26AS would also have information on transactions that used to be received up to the financial year 2015-16 in Annual Information Return (AIR). The Income-tax department is collecting information u/s 285BA from the FY 2002-2003 but the E-Filing Portal has information only from FY 2007-08 hence Form 26AS will be updated from FY 2007-08.
What will be new in Form 26AS?
It is stated that Form 26AS for any taxpayer, from now onwards, will display in Part E of the Form 26AS, different fields such as type of transaction, name of SFT filer, single/joint partly transaction, number of parties, amount, mode of payment and remarks, etc.
No more concealing the financial transaction
Furthermore, this would help the honest taxpayer with updated financial transactions while filing their returns, where it will desist those taxpayers who inadvertently conceal financial transactions in their returns.
The income-tax department had issued a Press Release Dated 18th July 2020: https://www.incometaxindia.gov.in/Lists/Press%20Releases/Attachments/844/Press-Release-New-Form-26AS-is-the-Faceless-hand-holding-of-the-Taxpayers-dated-18-07-2020.pdf