The due date for filing Income Tax Return (ITR) is inching closer and a number of taxpayers are still confused about where to start. Filing ITR is a complicated process given the need for detailed documentation. One such crucial document is Form 26AS which is used to cross check your tax credits during the financial year. According to experts, Form 26AS must be checked before filing your ITR in order remain at peace with the Income Tax Department and also to avoid double taxation at a later date.
Let us take a closer look at this document to understand how it helps in filing ITR:
To put it in simple terms, Form 26AS is a consolidated tax statement that is used as a proof of tax deducted (TDS) and tax collected (TCS) on your behalf. Along with TDS and TCS, Form 26AS contains the details of advance tax paid by you. The credits available in Form 26AS confirm that the deductor/collector has correctly filed the TDS/TCS on your behalf and that the same has been given to the government. It also ensures that the bank has furnished complete details of the tax deposited by you.
Form 26AS is divided into three parts- A, B and C.
Part A- It covers the details of tax deducted at source (TDS) on various heads such as salary, house rent, commission, etc.
Part B- It contains the details of tax collected at source (TCS) by the sellers of certain goods. Complete details of the seller along with the purchase value and tax deducted are displayed.
Part C- This part covers the details of tax payments directly made by you like self-assessment tax, advance tax, etc.
Apart from these, Form 26AS also include information about-
- Tax refunds received by you during the relevant financial year
- TDS on sale of immovable properties
- High value transactions like purchase of mutual funds, immovable properties, corporate bonds, etc.
Form 26AS is usually updated on quarterly basis and the credits that it reflects at the end of the financial year can be claimed while filing the ITR.
Downloading Form 26AS
You can download Form 26AS from TRACES website or from the netbanking facility of authorised banks. Log in to your account on the e-filing website of the Income Tax Department. Click on ‘View Form 26AS’ tab and then you will be redirected to TDS-CPC website. Choose the assessment year for which you need to view the form and fill in your birthdate (DDMMYYYY) as the password.
Importance of Form 26AS
Before filing your income tax returns, it is advised to view Form 26AS and reconcile your prepaid taxes with it to ensure smooth processing of your Income Tax Returns and also to avoid demand notice from the IT department. By introducing Form 26AS, the government obviated the need to submit your TDS certificates along with the tax returns. However, tax experts emphasize that you must verify the details of prepaid taxes with this statement and ask the deductor for rectification in case of any discrepancy. Non-availability of tax credit will generate a tax demand from the IT department resulting in double taxation.
Hence, in order to avoid such situation, you must view Form 26AS and reconcile prepaid taxes with it before filing income tax returns.