The Central Board of Direct Taxes has introduced a new format for the revised form 26AS for income taxpayers.
Why? The new format will ensure:
- Voluntary compliance
- Ensure tax accountability and
- Help in easy e-filing of income tax returns
While Finance Minister Nirmala Sitharaman has announced that Income Tax Filing Date has been extended to November 30th, The new form 26AS will help businesses get taxes sorted in order and prevent fraud.
What is Revised Form 26AS?
The Revised Form 26AS is one of the most important documents you need to file your income tax returns.
Technically, Form 26AS is a consolidated credit statement which contains details of various taxes deducted on your income by banks, financial and lending institutions.
How to download Form 26AS?
- Login to your income tax filing account here
- Click on ‘ View Form 26AS’
- View and download the form
Top Features of the New Income Tax Form
Voluntary compliance
The revised form 26AS goes beyond just showing taxes deducted by banks.
For example, the new form reduces the back and forth between banks and businesses, with a new format and increased tracking of financial transactions by the Government itself.
To increase compliance for taxpayers, the form will allow taxpayers more autonomy and control of their taxes. The new format also shows your Aadhaar number, date of birth, mobile number, email ID and your address.
CBDT recently brought out the new form 26AS for ease of filing of Income Tax Returns(ITRs)by taxpayers.The new form is a faceless handholding of taxpayers,to help them with updated financial transactions,so as to facilitate voluntary compliance &easy e-filing. #FacelessIncomeTax pic.twitter.com/w0as1LxwQP
— Income Tax India (@IncomeTaxIndia) July 18, 2020
Tracking of large financial transactions
The new form 26AS will have Statements o financial transactions in various categories to help taxpayers recall and trace their major financial transactions.
This also includes any purchase or selling of shares, real estate, cash payments for the purchase of pre-paid instruments by RBI and credit card bills.
Increased transparency of information
To increase transparency, the tax authority has been collecting information about high-value transactions including foreign currency, mutual funds etc. The revised Form 26AS also contains different fields such as:
- Type of transactions
- Name of the reporting entity
- Date of transaction
- Single or joint party transaction
- Number of parties, amount
- Mode of payment
- Remarks by the departments
This will help honest taxpayers with updated, no-hassle financial transactions while filing their returns and discourage concealing any transactions.
How to ensure your business transactions stay transparent
To ensure easy e-filing, the revised Form 26AS has new sections, columns and increased tracking of your transactions. However, you can also ensure transparency in your business transactions by adopting:
Online payments
You need to stop handling cash if you do not want the Income Tax Department to hound you during tax return season. If you have a business engaging in high-value transactions, ensure you use a trusted payment gateway.
Payment gateways allow you to maintain recurring payments, choose bulk payments and offer different payment modes to customers.
Read: How to choose the right payment gateway for your startups
Maintaining e-invoices
How do you keep track of your transactions with vendors? Maintaining long-term relationships with trusted vendors can happen if you regularly maintain invoices for purchase and sales of inventorying goods.
Read: How to generate e-invoices for your business
Establishing an e-commerce presence
It is low risk, free setup and wider reach for customers who love to use your products and services. Setting up an e-commerce store is not expensive and with the right platform, it can also be free.
The Instamojo online store has zero maintenance fee and once business requires you to reach more people, there is also a premium online store for a minimum cost and more features than you’d imagine.
