NEW DELHI: Tracking and declaring myriad transactions while filing Income Tax returns is set to get substantially easier for individuals, with the Finance Bill proposing to include details like property and share transactions in the all-important Form 26AS from June this year. Experts say the move shifts India steadily closer to a pre-filled tax return regime.
Mandatorily compiled and made available to the assessee by the I-T Department, the form had until now only displayed details of tax deducted at source (TDS) and an Annual Information Return (AIR) enumerating high-value transactions provided by banks and financial institutions.
However, due to advancing technology and the enhanced capacity of the system, “multiple information... such as sale/purchase of immovable property, share transactions etc. are being captured or proposed to be captured,” noted the budget memorandum. The I-T department will now need to provide this information to the assessee to “facilitate compliance”. The form can be downloaded from the assessee’s registered account on the I-T web portal.
Since the move requires a change in the earlier mandate and extends the ambit beyond TDS information, the existing section (203AA) in the I-T Act is proposed to be scrapped. A new section 285BB will be introduced mandating the I-T department to upload “a statement... setting forth such information, which is in the possession of an income-tax authority,” the memo said.
“It’s a step forward in the direction of pre-filled tax returns,” said Sonu Iyer, partner, People Advisory Services, EY, “The government is expecting to directly source financial transaction data, add it to the Form 26AS and then from there on to the employee’s tax return”. However, Iyer added that more clarity is needed on certain issues, like how the data for the months of April and May will be presented since the system will go into effect from June 2020.