What is Form 26AS and its components
It is income tax filing season and Kunal needs to know what his income tax contribution, for the year, is. His friend suggests downloading Form 26AS from the Indian Income Tax website. Kunal is confused about how this form is different from the one he files each year. Let us explain it to him.
This form should ideally be verified before Kunal files his annual returns. It is considered a consolidated tax statement for any individual with a Permanent Account Number (PAN). These are 5 main things Kunal will get from his Form 26AS:
• Details of Annual Tax Deducted (TDS) Along with the Names of Deducting Entities
• Details of Annual Tax Collected or Paid by Kunal
• Advance Tax and/or Assessment Tax Payments in the Year (Including Self-Assessment)
• Tax Refunds Received
• Annual Information Report (AIR) of High-Value Transactions in Shares, Mutual Funds etc.
Why is this form important?
Form 26AS ensures that Kunal’s taxes are in order and that his taxes have been paid or deducted accurately. It also shows him if all the information provided has no mistakes. Moreover, this form also has Kunal’s personal contact information, which, if required he’ll have to update or change accordingly.
Individual Components:
TDS: This includes tax deducted from interest income like Fixed Deposits, Mutual Funds etc. It will also include tax deducted at source from sale of immovable property.
Tax Collected: This section shows Kunal the annual tax he has paid in a financial year.
Refunds: From this section, Kunal can determine if he has received refunds on income tax, whenever they have been applicable.
AIR: This section gives details of any high-value transaction or investment Kunal has made during the financial year.
Why does Kunal need to view or download this form? (Conclusion)
Form 26AS captures all his tax information in one place, making it easier for him to view and understand. It also helps in claiming tax credits while filing his tax returns annually. This information is updated quarterly on the income tax website. Finally, with all the TDS information in one place, Kunal does not need to keep track of all his TDS receipts (from his investments). This form is a great resource not just for Kunal but all tax-payers.