Form 26AS will provide information regarding the tax deducted at source (TDS), tax collected at source (TCS).
We explain what is form 26AS and how one should use it while filing ITR.It is important to look at Form 26AS also known as an annual consolidated statement when filing an income tax return (ITR).
It contains the information that is available with the tax department from different sources. Various entities including banks, mutual funds, brokers etc are required to provide information with respect to specified financial transactions (SFTs) that are transactions which are above a specified limit.
For example, a bank has to file an SFT when the aggregate cash deposits of all the savings bank accounts of a client exceed ₹10 lakh in a year. Registrars have to file SFT for every individual involved in any transaction of an immovable property where the deal value exceeds ₹30 lakh.
Similarly, if you have bought financial instruments such as mutual funds, bonds and shares worth ₹10 lakh or more, it will be reported to the tax department by the issuer. Recently, the tax department has asked various entities including banks, post offices, companies, exchanges etc to give the information of the interest earned, capital gains etc to the department so that it can be provided prefilled to the taxpayers.
Apart from this, Form 26AS will also provide information regarding the tax deducted at source (TDS), tax collected at source (TCS). The TDS deducted by the employer will also be reflected in the Form 26AS. Therefore, it is important to cross verify the information with Form 26AS while filing your ITR. It is possible that wrong information may have been reported by the specified entity which may result in a notice from a tax department.
From this year the tax department is likely to provide pre-filled information in the tax forms related to interest income, dividend received, and capital gains earned. It is important that you verify the information available in pre-filled form with the information you have in the in various documents such as bank statement, Form 16 etc.
