Form 26AS : Importance in tax filing
The Form 26AS (ANNUAL TAX STATEMENT) is consolidated tax credit statement issued by Income Tax department to Tax Payer. Entries in the Tax Credit Statement (Form 26AS) are generated when a valid PAN number has been reported in quarterly TDS statements. It shows how much of your tax has been received by the IT Department and is consolidated from multiple sources like your salary / rent /professional / interest income etc. This form contains the annual tax statement under Section 203AA and second provision to Section 206C (5) of the Income Tax Act, 1961 and Rule 31AB of Income Tax Rules, 1962. TDS certificates i.e. form 16 and 16A must be cross checked with form 26AS.
Form 16 is issued by an employer whereas Form 16A is issued by any other TDS deductors not being an employer viz. a bank deducting TDS on Interest, a client deducting TDS on Professional fees, a tenant deducting TDS on Rent.
Form 26AS is important for claiming the credit of TDS/TCS deducted/collected by the deductor/collector which has been deposited to the account of the government. The deductor/collector should accurately file the TDS/TCS statement giving details of the tax deducted/collected on your behalf.
The form is basically divided into several parts as follows:
PART A — Details of Tax Deducted at Source
· It consists of detailed list of tax deductors and total amount deducted/paid or credited to you with tax deducted and tax deposited thereon. TDS reflected in Form 16 and Form 16A should be matched with this part.
PART A1 — Details of Tax Deducted at Source for 15G / 15H
· This part will show transaction in those financial institutions such as banks where the individual has submitted Form 15G / 15H. TDS in these cases would be zero. It enables you to keep a track of all the interest gain which has not been taxed.
PART A2 — Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA (For Seller of Property)
· Here u/s 194IA a buyer of Immovable property has to deduct TDS and remit the TDS to government through challan Form 26QB provided the consideration for transfer of an immovable property is not less than Rs. 50 lakhs. Amount will reflect under this part if you are a seller of the property.
PART B — Details of Tax Collected at Source (TCS)
· Every person, being a seller ,shall collect tax at source(TCS) from the buyer of goods specified in section 206C(1). TCS is collected on sale of Liquor, timber, scrap etc. at the time of debiting of the amount payable to buyer or at the time of receipt of payment, whichever is earlier.
PART C — Details of Tax Paid (other than TDS or TCS)
· All advance tax payments, self-assessment tax payments are reflected under this part.
PART D — Details of Paid Refund
· If you have got any tax refunds in that assessment Year it would be listed under this part.
PART E — Details of AIR Transaction
· If you make some high value transactions, such as investment in property and mutual funds, then these transactions are automatically reported to the income tax department by banks and other authorities through Annual Information Return (AIR)
PART F — Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA (For Buyer of Property)
· As mentioned above in Part A2. Amounts will reflect in this column if you are a buyer of the property.
Eg:- Mr. X a salaried individual working in A Ltd and drawing a salary of Rs.40,000 per month which is Rs.4,80,000/- per annum during the financial year 2013–14 i.e Assessment Year 2014–15. He has made declarations to A Ltd for deductions for LIC premium of Rs.10,000, Provident Fund Rs.25,000, Mediclaim Rs.3,000. Housing Loan Interest Rs.30,000 and principal repayment of Rs. 12,000/-. Therefore his taxable Salary is Rs.4,00,000/- after all the above deductions. Basic Exemption limit for individual is Rs.2,50,000/- on which no TDS is applicable. On the balance amount of Rs.1,50,000 , tax is levied @ 10% which amounts to 15,000. A Ltd will therefore deduct an amount of Rs. 1,250 per month from Mr. X salary from the beginning of first month of the financial year. Any shortfall in TDS is usually deducted in last month of the financial year. A Ltd will file quarterly TDS returns by depositing the TDS with government on prescribed due dates. A ltd will issue Form 16 to Mr X which is a certificate of salary drawn and TDS deducted therefrom by 31st May. Mr. X should firstly calculate the TDS deducted from his monthly salary slips with TDS reflected in Form 16 if it matches with the amount he should further check whether the same amount matches with TDS reflected in Form 26AS.
Any person should duly check his Form 26AS before filing his income tax returns as ignorance of the same can simply lead to tax credit mismatches resulting to notices from the IT Departments, IT Refund withheld or even penalties. One must remember the saying ‘Precaution is always better than cure’ and also ‘stich in time saves nine’ both equally relevant for the above discussed subject.