Form 26AS Tax Credit Statement

1.Traces Form 26AS Meaning

The Income Tax Department of India maintains a statement under the form 26AS containing the details of Tax Credit in the account of a taxpayer as per the records of the department. It is mandatory to prepare traces form 26AS under the Rule 31AB of Income Tax Act, 1961.

2. Form 26AS Traces Tax Credit Statement

There are three ways through which an individual can pay the income tax namely, TDS (Tax Deducted at Source), TCS (Tax Collected at source) or Advance Tax.

 Only one can be used to pay the taxes. The total tax paid is recorded by the Income Tax Department as Tax Credit. Tax Credit can be collected only through TDS, TCS or Advance Tax.

 The tax claimed by the taxpayer can be collected by him as per traces form 26AS.

3. Difference Between Actual TDS & TDS Reflected in Form 26AS

In case of difference between the actual and stated TDS, the taxpayer can not claim the TDS

of the actual amount. The discrepancy can occur due to the following reasons:

1. Non-compliance of details to the Department
2. Incorrect Account Number
3. Wrongly filed TDS return
4. Incorrect Assessment Year
5. Late deposition of TDS
6. Omission in Return
7. Mismatch in Quoted and Actual TDS.

In this case, the taxpayer should approach the deductor and request him to take necessarysteps for the rectification of the TDS. The deductor may file the correct TDS/TCS or submit a correction statement for the same.

4. What additional information will be available in the new 26AS?

Information in respect of specified financial transactions which include,

1. Transactions of purchase/ sale of property, goods, services, works contract, investment, expenditure, taking or accepting any loan or deposits of value of 50,000 or more
2. Information relating to tax assessment and appeals including tax demand, refund, tax proceedings etc
3. Information received from any other authority under any Thus any adverse action initiated or taken or found or order passed under any other Law such as Customs, GST , Benami Law etc shall beincluded.
4. Information shall include the Turnover , Import values, Export values
5. Information from any other Country under the Tax Treaty / Exchange of information on about income or assets of the Taxpayer in other Country
6. Basic Information about Tax Payer like Mobile Number, E-mail I’d and Aadhar

What’s interesting to note is that, information on this form will not be a one-time affair at year end. This will be a live 26AS, which can be updated regularly, within 3 months from the end of the month in which such information is received.

This implies that Banks , Financial institutions or any other Authority etc. while carrying out due diligence of the person/ corporate concerned will now ask for Form 26AS so as to know about the transactions of an individual or corporate. In future, all your financial transactions in India are transparent with the Government.