Form 26AS is the annual tax statement that provides taxpayers access to the tax deduction/tax collection details and income. It contains comprehensive information related to salary income, business and professional receipts, interest income earned on bank deposits, etc along with the respective tax deduction/collection details.
These details are generated based on returns of tax deductions/collected by employers, tax deductors, tax collectors, banking institutions, etc., to the Income Tax Department every quarter. Additionally, Form 26AS also includes information on tax deductions for the sale/purchase of immovable property and virtual digital assets.
Alok R Agrawal – Partner, Deloitte India says, “While Form 26AS can be downloaded any time during the FY from the income-tax portal or through the net banking facility, the best time to source it is around 15 June, by the time withholding tax returns filed (due 31 May) by most parties paying income and deducting tax, would have been processed for the preceding FY. One could look at Form 26AS during the year to consider the income and corresponding tax credits for computation of advance tax.”
The salary income (for salaried individuals) or sales turnover/receipts (for businesses/professions) reported in the income-tax returns must be aligned with the ‘Total Amount Paid/Credit’ as per Form 26AS. This enables accurate income reporting and claim of corresponding tax credits available in Form 26AS at the time of filing of ITR.
Rahul Gupta, Subject Matter Expert, SN Dhawan & CO LLP said that over the past few years, the Centralized Processing System (CPC) has automated various tasks, from processing income tax returns (ITR) to cross-referencing them with multiple sources like Form 26AS, Tax Audit Reports, and handling refund processing. Notices are now issued automatically whenever discrepancies are found, demonstrating that India’s income tax processing infrastructure is becoming increasingly fast and more efficient.
“To avoid the issuance of such notices, it is advisable to consider Form 26AS and report the income mentioned therein in the ITR as well as claim the tax credits available accordingly. Therefore, it is extremely important for taxpayers to be aware of this form while filing an income tax return,” said Gupta.