Tag: #26AS

GST Department using 26AS, AIS & ITR for Verifying Income Tax Data

The GST Department utilizes various sources of information, including Form 26AS, Annual Information Statement (AIS), and Income Tax Returns (ITR), to verify income tax data and ensure compliance with tax laws. Here’s how these documents are used:

Form 26AS:

  • Tax Deducted at Source (TDS): This form provides details of TDS deducted from various income sources like salary, interest, rent, etc. The GST Department can cross-verify this information with the TDS returns filed by deductors and the taxpayer’s ITR.
  • Tax Collected at Source (TCS): 26AS also reflects TCS details, which helps verify tax collected on specific transactions like the sale of goods exceeding a certain threshold.
  • Advance Tax and Self-Assessment Tax: Details of advance tax and self-assessment tax payments made by the taxpayer are available in Form 26AS, aiding in verifying tax compliance.
  • High-Value Transactions: Information on high-value transactions like the purchase or sale of immovable property, shares, and mutual funds is included in 26AS, which can be used to identify potential tax evasion or non-compliance.

Annual Information Statement (AIS):

Income Tax Returns (ITR):

  • Declared Income and Tax Liability: The ITR filed by the taxpayer provides details of their income from various sources, deductions claimed, and the calculated tax liability.
  • Cross-Verification: The GST Department can compare the information declared in the ITR with the data available in Form 26AS and AIS to identify any inconsistencies or discrepancies.
  • Assessment and Scrutiny: ITRs are used for tax assessments and may be selected for scrutiny if discrepancies or red flags are detected.

Benefits of using these documents:

  • Improved Tax Compliance: By cross-verifying data from multiple sources, the GST Department can identify and address tax evasion, underreporting of income, and other non-compliance issues.
  • Data Accuracy: The use of multiple sources helps ensure the accuracy of income tax data and reduces errors.
  • Efficient Tax Administration: These documents facilitate efficient tax administration by providing the necessary information for assessments, audits, and investigations.
  • Transparency and Accountability: The availability of these documents promotes transparency and accountability in the tax system.

Overall, the utilization of Form 26AS, AIS, and ITR by the GST Department strengthens tax administration, improves compliance, and ensures a fair and efficient tax system.

Incidents Highlighting How the GST Department Actively Monitoring

Case 1: Pani Puri Seller from Tamil Nadu Received GST Notice

A street vendor selling pani puri in Tamil Nadu received more than 40 lakh in PhonePe transactions.

The GST department flagged these digital transactions, suspecting business turnover exceeding the 20 lakh GST registration threshold.

A GST notice was issued, asking the vendor to explain why GST registration and tax payment were not made.

Key Takeaway: The GST department is tracking digital payments (UPI, PhonePe, Paytm, GPay, etc.) and linking them to potential GST liabilities.

Case 2: GST Notice Due to Mismatch in 26AS and GST Portal

A taxpayer had TDS deductions reflected in Form 26AS on income from services.

However, this income was not correctly reported in the GST portal as taxable turnover.

The GST department issued a discrepancy notice, asking for an explanation and tax payment if applicable.

Key Takeaway: The GST department is matching TDS data from Form 26AS with GST returns to identify undeclared income.

Case 3: GST Notice Based on Income Discrepancy in 26AS

A taxpayer reported higher income in Form 26AS (as per TDS deductions) but declared a lower turnover in GST returns.

The GST department suspected GST underreporting and issued a notice asking for reconciliation.

The taxpayer was asked to justify the difference in declared turnover and income as per Form 26AS.

Key Takeaway: The GST department is using Form 26AS data (TDS details) to compare with GST turnover, ensuring all taxable supplies are properly reported.

Points to Remember while Reporting

  • Do not report turnover more than Rs.20 lakh in IT Return if unregistered in GST.
  • If you are unregistered in GST, then restrict UPI payment up to 40 lakh in case of goods and 20 lakh in case of service.
  • Never over-report turnover in ITR for say loan purposes.

Taxpayers must ensure accurate reporting across GST and IT returns to avoid compliance issues.

Taxpayers’ Hardship Resolved: ICAI’s Representation to CBDT for Form 26AS/TIS/AIS Issues

ICAI sends representation to CBDT Finance Ministry of India for concerns related to 26AS, AIS, TIS & e-filing of Forms

Sub: Concerns in relation to Form 26AS/TIS/AIS and in e-filing the ITR Forms

The Institute of Chartered Accountants of India (ICAl), being a partner in nation building plays a pivotal role in strengthening the relationship between the taxpayers and the Department; by bringing to the notice of the Department, genuine hardship being faced by the taxpayers so that the same can be resolved timely for effective tax compliance. In this direction, we bring to your kind notice issues faced by taxpayers with respect to accessing Form 26AS/TIS/AIS and preparing and filing their returns of income.

As you are kindly aware, section 139(1) of the Act provides for the statutory timeline of 31st July, 2024 for filing of returns of income of for the A.Y. 2024-25 of individuals, HUFs, firms who are not subject to tax audit. Many of the taxpayers are facing difficulty in relation tor Form 26AS/AIS/TIS due to glitches in the income-tax e filing portal.

Concerns/issues faced by the taxpayers

Form 26AS – What is Form 26AS? View & Step-by-step process to download Form 26AS

Your Tax Credit Statement or Form 26AS is an important document for tax filing. Gone are the days when one has to download Form 26AS for filing IT returns manually. The scope of the statement has now been expanded to include details of foreign remittances, mutual funds purchases, dividends, refund details, etc.

What is Form 26AS?

The Tax Credit Statement, also known as Form 26AS, is an annual statement that consolidates information about tax deducted at source (TDS), advance tax paid by the assessees with self-assessment tax, and tax collected at source (TCS). All this information is related to your Permanent Account Number (PAN).

Moreover, the form shows details on any sale or purchase of immovable property, cash withdrawals or deposits from savings accounts, and mutual funds.

You may claim the tax deducted as shown in this form at the time of filing your Income Tax Returns (ITRs) for the relevant financial year.

What is the purpose of Form 26AS?

This form is issued under section 203AA of the Income Tax Act, 1961 and Rule 31AB. It is an important document that can be used for the following purposes.

  • Acts as proof that tax has been deducted and collected on your behalf
  • Confirms that the bank has accurately provided the details of tax deposited
  • Works as a record of tax paid in your ITR
  • Confirms that accurate tax is deducted by different entities and has been deposited in the government account

How to view Form 26AS?

You may view Form 26AS by PAN no. on the TDS Reconciliation Analysis and Correction Enabling System (TRACES) portal.

Alternatively, the form can be viewed via Internet banking from Financial Year 2008–2009. The following banks allow you to view the form via net banking.

Axis BankBank of BarodaBank of India
Bank of MaharashtraCitibankCity Union Bank Limited
Corporation BankICICI BankIDBI Bank
Indian BankIndian Overseas BankKarnataka Bank
Kotak Mahindra Bank LimitedOriental Bank of CommerceState Bank of India
State Bank of MysoreState Bank of TravancoreThe Federal Bank Limited
The Saraswat Co-operative Bank LimitedUCO BankUnion Bank of India

Step-by-step process to download Form 26AS

The Form 26AS download can be done via the TRACES website. Alternatively, you can use your login credentials on the income tax e-filing portal to download this form.

Here is the step-by-step procedure.

  • Enter your credentials and click ‘Continue’
  • Under ‘e-file’, select ‘Income Tax Returns’
  • Click ‘View Form 26AS’ and then select ‘Confirm’
  • Click ‘Proceed’ on the next page followed by selecting ‘View Tax Credit’
  • Input ‘View Type’ and ‘Assessment Year’ and choose the format
  • Click ‘View/Download’ to finish the process

Different components of Form 26AS

When you view Form 26AS before filing your ITR, ensure the information in the form is accurate. The following are the components of the form.

  • TDS and TCS
  • Details of advance tax and self-assessment tax paid
  • Income tax refund information
  • Details related to the sale of immovable property
  • Information about Annual Information Return (AIR) transactions

Part A: Details of Tax Deducted at Source (TDS)

It shows the TDS related to your PAN. The deductors file quarterly TDS returns, which can be seen in this form.

The information in this section includes the name and Tax Deduction and Collection Account Number (TAN) of deductors, the total amount paid, total tax deducted, and total deposited tax against your PAN.

Part A1: Details of TDS for Form 15G or Form 15H

It comprises information about the income when no TDS is applicable; this is when you submit Form 15G or 15H.

If you have not submitted either of these forms, it shows ‘no transactions present’.

Part A2: Details of TDS on sale of immovable property under section 194 IA (for sellers)

When you sell an immovable property during the previous year and deduct taxes on it, the amount is shown under Part A2.

Part B: Details of Tax Collected at Source (TCS)

This section shows the details of TCS by sellers of specified products when these are purchased by the assessees.

Additionally, vendor details like name and TAN of collector, the total amount paid, the total tax collected, and the total TCS deposited are shown here.

Part C: Details of tax paid, other than through TDS or TCS

It comprises details of any tax paid, which includes self-assessment and advance taxes. Additionally, information related to the payment challans is seen in this part.

Part D: Details of refunds received

Information related to tax refunds, such as assessment year, payment date and mode, refund issued, nature and amount of refund, interest paid, and remarks are shown in Part D.

Part E: Details of Annual Information Return (AIR) transactions

This section shows details of high-value transactions that ‘specified persons’ like mutual funds and banks must report. This part that reflects specified financial transactions (SFTs) was previously known as AIR.

Part F: Details of tax deducted on the sale of immovable property under section 194 IA (for buyers)

This part is for buyers of immovable property and shows the details on the TDS amount deducted while buying the property.

Part G: Details of TDS defaults (processing of defaults)

Any defaults related to the processing of statements are shown in this section. However, it does not reflect any demands raised by the assessing officers (AOs).

Important Questions

  • How do I download Tax Credit Statement or Form 26AS? To view or download Form 26AS, log in with your income tax portal account credentials.
    1. Go to the ‘e-File’ tab on the home page, click ‘Income Tax Returns’ from the drop-down, and select ‘View Form 26AS’. 
    2. Read the disclaimer and click on ‘Confirm’, and you will be redirected to the TRACES portal.
    3. Agree to the acceptance and usage of Form 16/16A generated from TRACES, and click on the ‘Proceed’ button. 
    4. Now, click ‘view tax credit (Form 26AS)’ to view Form 26ASA. 
    5. Select the ‘Assessment Year’ and ‘View type’ (HTML, Text or PDF). 
    6. Click on the ‘View/Download’ button. 
    7. Form 26AS will open up on the screen. If you want to download it as PDF, click on the ‘Export PDF’ button. A PDF file of the Form 26AS will be downloaded.
  • How to view Form 26AS through net banking? Taxpayers can view/download Form 26AS through net banking of any of the authorised banks. Form 26AS can be viewed only if the PAN is mapped to that particular account. Click here to check if your bank is authorised to provide the facility of downloading Form 26AS.
  • How to check Form 26AS online without login? To view or download Form 26AS from the income tax e-filing portal, you must register yourself. However, if you wish to download without login, you can do the same through your net banking facility of authorised bank where your account is maintained. Login to your net banking account using your internet banking login credentials and click on the ‘Tax Credit Statement’ to view details.Click here to check if your bank is authorised to provide Form 26AS
  • When does Form 26AS get updated? Form 26AS gets updated when the income tax department processes the TDS returns filed by the TDS deductors. Thus, the last date for filing TDS returns for the fourth quarter is 31st May. Further, seven days are taken to process the TDS return filed. Once the processing is completed, Form 26AS is updated with the latest amount of TDS reported against your PAN.
  • What is the password of Form 26AS in pdf format? The password to open the pdf format of Form 26AS is the taxpayer’s date of birth/incorporation in DDMMYYYY format.
  • What do you mean by transaction date and date of booking in Form 26AS? Transaction date means the date of credit or payment of income, whichever is earlier.
    Date of booking means the date on which TDS return is processed and the amount booked in Form 26AS. This date will be the date after the TDS return is filed.
  • What is Form 26AS used for? Form 26AS gives you all the details of tax credit for taxes paid during the financial year. Form 26AS is a statement that provides details of any amount deducted as TDS or TCS from various sources of income of a taxpayer. It also reflects advance tax/self-assessment tax details and high-value transactions entered into by the taxpayer. Form 26AS has been updated to include details of specified financial transactions, pending and completed assessment proceedings, tax demands and refunds.
  • Why is Form 26AS required? Form 26AS is required because it provides proof of tax deducted and collected at source on our behalf. Further, it confirms that the entities (employers, banks, etc.) have deducted accurate taxes on our behalf and deposited them into the government’s account so that credit for the same can be claimed.
  • How to rectify errors in Form 26AS? How to make corrections in Form 26AS? The only way to rectify the error in Form 26AS is to inform the deductor and ask him to file a rectified TDS return. The deductee cannot himself make any corrections in the Form 26AS.
  • What is the meaning of the date of booking in Form 26AS?Date of booking means the date on which TDS return is processed and amount booked in Form 26AS. This date will be the date after the TDS return is filed.
  • When will TDS reflect in Form 26AS? Tax deducted at sources gets reflected in Form 26AS after the deductee files TDS return and the same is processed by the CPC. Usually it takes around seven days for CPC to process the TDS return filed.
  • How to download Form 26AS in excel format? Follow the below steps to download Form 26AS in excel format:
    1. Login income tax e-filing account > Go to the ‘e-File’ menu, click ‘Income Tax Returns’ from the drop-down and select ‘View Form 26AS.
    2. Read the disclaimer and click on ‘Confirm’.
    3. And the user will be redirected to TDS portal, agree to the acceptance and usage of Form 16/16A generated from the TRACES portal and click on the ‘Proceed’ button.
    4. Click ‘View tax credit (Form 26AS)’. 
    5. Now select the ‘Assessment Year’ and ‘View type’ as ‘Excel’. Click on the ‘View/Download’ button.

What To Do If Discrepancies Appear in Actual TDS And TDS Credit As Per Form 26AS?

Every person deducting tax at source has to furnish the details of tax deducted by him to the Income-tax Department. The details will cover the name of the deductee, Permanent Account Number of the deductee, amount of tax deducted, amount paid to the deductee, date of payment of TDS to the credit of Government, etc. On the basis of the details of TDS provided by the deductor, the Income-tax Department will update Form 26AS of the deductee.
Many times the actual amount of TDS and TDS credit as appearing in Form 26AS may differ and it may happen that the TDS credit appearing in Form 26AS may be less as compared to actual TDS, this may happen due to reasons like non-furnishing of TDS details to the Income-tax Department by the deductor, deducting the tax in incorrect Permanent Account Number, etc. In such a case the deductee should approach the deductor and request him to take the necessary steps to rectify the discrepancy due to above reasons. 
The Income-tax Department updates the TDS details in Form 26AS on basis of details provided by the person deducting the tax (i.e., the deductor), hence, if there is any default on the part of deductor like non -furnishing of TDS details (i.e., TDS return) to the Income-tax Department, deducting the tax in incorrect Permanents Account Number, etc. then Form 26AS will not reflect the actual TDS. In such a case, the taxpayer may not be able to claim the credit of correct TDS. Hence, the taxpayers are advised to confirm the tax credit appearing in Form 26AS and should reconcile the difference, if any. 

​If discrepancy is due to deductor , then he may file TDS/ TCS correction statement and correct the same.

Source: Income Tax India’s Official Portal

What is Form 26AS?

It is a form issued under Rule 114-I​​, wherein the following information related to taxpayer is published:

a) Information relating to TDS and TCS;

b) Information relating to Specified Financial Transactions (SFT);

c) Information relating to payment of taxes;

d) Information relating to demand and refund;

e) Information relating to pending proceedings;

f) Information relating to completed proceedings;

g) Information received from any officer, authority or body performing any functions under any law or information received under an agreement referred under section 90 or section 90A;

h) Relating to GST return;

i) Foreign remittance reported in Form 15CC;

j) Information in Annexure-II of the Form 24Q of the last quarter

k) Information in ITR of other taxpayer

l) Interest on Income Tax Refund;

m) Information in Form 61/61A where PAN could be populated;

n) Off Market Transactions Reported by Depository/Registrar and Transfer Agent (RTA);

o) Information about dividend reported by Registrar and Transfer Agent (RTA);

p) Information about purchase of mutual fund reported by Registrar and Transfer Agent (RTA); and

q) Information received from any other person to the extent it may be deemed fit in the interest of the revenue.

Source: Income Tax India’s Official Website https://incometaxindia.gov.in/Pages/default.aspx

Breaking: Service Tax Liability Can Not Be Imposed Only On The Basis Of Form 26AS [Read Judgement]

In the case of M/s Luit Developers Private Limited vs Commissioner of CGST & Central Excise, Dibrugarh, the CESTAT Kolkata has held that:

I also find that the appellant is a Pvt Ltd Company and figures in Form 26AS are already included in Revenue from Operations in the Profit/Loss Account of Balance Sheet, which is a public document, and therefore no suppression can be alleged as held in Hindalco Industries Ltd (supra). I also find that the Department has not adduced any positive evidence to show malafide intention for evasion of service tax and therefore extended period cannot be invoked as held in Pushpam Pharmaceuticals Limited (supra).

Therefore, in view of the above discussions and decisions cited, the entire demand fails on merits as well as on limitation. Thus, there can be no imposition of Service tax, interest and penalty on the appellant. The impugned order cannot be sustained and is set aside. Accordingly, the appeal is allowed with consequential benefits.

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Taxpayers receive notices: Data mismatch between AIS and Form 26AS the reason

Did you file an early income-tax return, before the Annual Information Statement (AIS) was launched? Chances are your tax return may have attracted a demand notice if you had ignored some essential income received during the financial year.

So far, one had to refer to the annual tax statement or the Form 26AS before filing returns. The AIS was launched only on November 1, 2021. While only high-value transactions and tax deductions at source are mentioned in Form 26 AS, the AIS contains all details of savings bank interest, dividends, capital gains and share transactions.

Many taxpayers got lower refunds this year due to data mismatch between Form26AS (from NSDL) and the pre-filled income tax forms (maintained by the income-tax department).

Kirti Misal, 38, had forgotten to mention the savings bank account interest from an old account that she hardly uses. “I didn’t have the passbook or online access for that account. In the rush to file the returns, I didn’t mention the savings interest,” she says.

Since Kirti filed her return in October 2021, she didn’t have access to the AIS and has engaged a chartered accountant to respond to the notice.

“The recently-launched AIS is a comprehensive document and contains a vast amount of information such as savings bank interest, dividends. The existing Form 26 AS used to feature only the FD interest and wouldn’t capture the details of dividends. So, those who didn’t have the AIS information available before and filed the returns only based on Form 26 AS have been receiving notices,” says Karan Batra, founder, Chartered Club.

The differential in actual taxable amount and the reported transaction amount has led to many notices.

Ahmedabad-based Chartered accountant, Raju Shah, says, “There are many adjustment-linked notices that we have received for our clients. So, with regards to capital gains, the actual cost has been considered in AIS. But under capital gains, an indexed cost is to be considered. Due to the difference in the net and gross taxable income, an income tax notice has been received under Section 143 (1).”

Shah had to respond to the notice within 30 days, but the income tax portal wasn’t permitting uploads of response, so he resorted to the manual response method.

Similarly, there is a difference in share sale transactions too. “The value of actual taxable sale never matches as per the AIS as the gross amount is mentioned including brokerage and other costs. The notices are computerised, based on the AIS figures and hence even indexed costs aren’t considered,” says Paras Savla, partner at KPB & Associates.

“Double reporting (amount reflected under two PANs) is being done for specified financial transactions when it comes to joint holding in shares and mutual funds,” Savla adds.

What to do?

So, if you have received such a notice via email or post then check the timeline to respond to the notice and avoid delay. Assess whether the mistake is actual or a different calculation has been considered.

“For bank account interest, reporting of dividends, the tax assessee is responsible. With or without AIS, it has to be reported,” says Shah.

If the tax demand is valid, then go ahead and follow the due procedure. In case you need to file for rectification or report any mismatch, then the online option is available once you log into the new income tax portal.

How to avoid notices

If you are yet to file your tax return, then do check both the Form 26 AS and the AIS before filing the tax return. Do not forget to take into account all the bank accounts for the purpose of savings bank account interest and dividends. Remember, some income would not be taxable, but yet has to be declared in the income tax return.

This is critical in the current year, as the assessees have not much time to revise the return. This is because due date for filing original ITR is 31st December 2021 (extended) and for revised ITR, it is 31st March 2021.

Only Amount Reflected in Form 26AS Does Not Mean that Assessee is the Actual Beneficiary Unless It is Established: ITAT

In the case of Dr Swati Mahesh Vinchurkar vs DCIT, ITAT Surat bench has held that:

We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. There is no dispute that the assessee is resident of Surat. The assessee is qualified Doctor being Pediatric (Child Specialist). While filing her return of income the assessee has shown income from profession and other sources. During the process by CPC, the additions were made in the hand of assessee on the basis of TDS shown in Form-26AS. We find that in response to the notice of CPC, the assessee denied of having such income and that her response was ignored. Before ld CIT(A) the assessee again specifically contended that she has not earned such income nor any work was performed by her. We find that despite specific contention of the assessee, the ld CIT(A) instead of verifying the facts confirmed the additions by taking view that it seems that CPC had considered the appellant explanation before making disallowance and that there is prima facie evidence. We find that both the authorities below acted in a mechanical way. There is no consideration of the contentions raised by the assessee that she has not worked or earned any income from such deductor. In our view once the assessee denied that she has not earned such income as reflected in her Form-26 AS, the onus shift on the revenue authorities to prove such income of the assessee. The addition is based solely on the basis of TDS shown in Form-26AS, ignoring the submissions of the assessee. The ld. AR for the assessee vehemently argued before us that the deductor if more than 1000 KM away from the place of practice of assessee. Considering the peculiar facts of the present case, we find merit in the submissions of the ld AR for the assessee that the assessee had entered into any such transactions and the lower authorities have not made any verification or effort to verify such transactions and there is certain mistake of entering the wrong PAN, which belongs to the assessee and the addition made in the income is uncalled for.

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