Thread by @NagpalManoj

Thread on implication of new 26AS Form of Income Tax

Background
On 18July20, Income Tax Dept informed that new 26AS form is implemented

New 26AS will now include certain high value transactions (explained in thread). How does it impact u is what this thread explains

(1/n)

First let's start with basics

Q: What is Form 26AS Form?
Ans: Till now Form 26AS, was a statement that IT dept used to provide u to capture

(a) TDS deducted from u (For eg: Ur company deducting TDS on ur salary)
(b) TCS: Tax collected at source (house property etc)

(2/n)

Now what has changed?

Now Form 26AS, will have a new section known as Section E

Section E will also capture certain high value transactions that you do in a financial year

So at a glance it will help u see you large txns in a year. And we explain below which txns

(3/n)

Q: Tell me which txns & what do u mean by large txns (how large?)
Ans: For eg: if u invest in a mutual fund > 10 lacs in a year. That is a large txn and it will be captured in this statement

Not a single txn, but cumulative in a year if in a single MF u invest > 10 lacs

(4/n)

Q: Ok I get it, tell me more which all txns will be included?
Ans: 14 types of txns are included and here is the full list
1) Fixed Deposits together in Bank > 10 lacs in a year
2) Credit Card Bills > 10 lacs (in a year) if paid by cheque
and > 1 lacs if paid by cash
(5/n)

3) If u buy bonds > 10 lacs in a year
4) If u buy shares > 10 lacs in a year
5) If u tender shares for buyback > 10 lacs in a year
6) If u buy Fx > 10 lacs in a year
7) If u buy MFs > 10 lacs in a year
8) Real Estate > 30 lacs
9) Purchase of Bank drafts > 10 lacs with cash
(6/n)

10) If u deposit cash in savings bank account > 10 lacs
11) Cash deposts or withdrawals from current account > 10 lacs

And some other routine ones (related to demonetisation)

All this will be shown in Section E in your Form 26AS of your previous years also!

(7/n)

Q: How does all this impact us?
Ans For honest tax payers, it is actually beneficial. Now we have a single point source of all large txns which will help us
For those who evaded taxes - earlier also IT dept knew it - Now it is putting it in their face and telling IT knows
(8/n)

Q: So does it mean u should do txns < 10 lacs. For eg: Make a FD < 10 lacs

Ans: First, this is not single txn value. Anyways all ur FDs (or other txns as detailed above) will be cumulatively (in a single bank) looked at,

So no point trying to make smaller txns

(9/n)

Q: I am worried will IT dept harass me now, if I spend too much on credit cards?

Ans: Again, honest tax payers need not worry.

But if someone is not paying any taxes saying negligible income but spends > 10 lacs, IT dept will surely Q him on how he can spend so much
(10/n)

Or for eg:, if u say u hv negligible income in ur tax return and make FDs in Bank of > 10 lacs or invest in MFs > 10 lacs , be ready for Q on without income, how can u save so much

In fact for last year, based on this data, people hv been identified already by IT dept

(11/n)

Q: Where can I check my Form 26AS?

Ans:
1) Log in to ur account incometaxindiaefiling.gov.in
2) Go to My Account -> View Form 26AS

All previous years is already be updated with thi. So u can look at it for the past
For 2019-20, data is yet to be updated

*** End ***
(12/12)