The New Rule 114-I (read below in the article) inserted in Income tax rules,1962 along with major changes in Form 26AS has been notified by CBDT to share annual financial information in respect of each taxpayer not only of taxes paid by of TDS/TCS or otherwise.
What changes in Form 26AS ?
Now this new form 26AS will also provide information in respect of specified financial transactions which include transactions of purchase/ sale of goods, property, services, works contract, investment, expenditure, taking or accepting any loan or deposits of such value as may be prescribed but not less than of Rs 50,000.
Also information about income tax demand, refund, proceedings pending, and proceedings completed which may include assessment, reassessment under section 148,153A, 153C, revision an appeal will also be shared in this form 26AS.
Further, an enabling provision has been notified empowering the CBDT to authorize DG Systems or any other officer to upload in this form 26AS, information received from any other officer, authority under any law.
Thus any adverse action initiated or taken or found or order passed under any other law such as custom, GST, Benami Law etc. including information about Turnover, import, export, etc. will also be put in this form 26AS.
So that not only the concerned taxpayer but also all the Income Tax authorities will know and have access to such information.
This form 26AS will also provide information received by Tax Deptt from any other country under the treaty /exchange of information about income or assets of the taxpayer located outside India.
This Changes in form 26AS will also have Mobile Number, email I’d and Aadhar No.of the taxpayer.
Moreover, information on this form 26AS will not be a one-time affair at year-end. This will be a live Form 26AS, as this will be updated regularly within 3 months from the end of the month in which such information is received.
Thus form 26AS will now be a complete profile of the taxpayer for that particular year as against earlier form 26AS which just provided the information about taxes paid by way of TDS/TCS or self-assessing.
Due diligence through Form 26AS:-
The implication of this new form 26AS will be that banks, financial institutions or any other authority or customer, buyer, etc. while carrying out due diligence of the person/ corporate concerned will now ask for form 26AS so as to be sure that there are not any major issues about such person/corporates.
This will now make it difficult for any taxpayer to hide information from any bank / financial institution/ authority about any proceedings against under any law or tax demand, tax disputes, etc.
What is Rule 114-I ?
114-I. (1) The Principal Director General of Income-tax (Systems) or the Director-General of Income-tax
(Systems) or any person authorized by him shall, under section 285BB of the Income-tax Act,1961, upload in the registered account of the assessee, an annual information statement in Form No. 26AS containing the information specified below, which is in his possession within three months from the end of the month in which the information is received by him:─
(i) Information relating to tax deducted or collected at source
(ii) Information relating to specified financial transaction
(iii) Information relating to payment of taxes
(iv) Information relating to demand and refund
(v) Information relating to pending proceedings
(vi) Information relating to completed proceedings
(2) The Board may also authorize the Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems) or any person authorized by him to upload the information received from any officer, authority or body performing any function under any law or the information received under an agreement referred to in section 90 or section 90A of the Income-tax Act,1961 or the information received from any other person to the extent as it may deem fit in the interest of the revenue in the annual information statement referred to in sub-rule (1).
(3) The Principal Director General of Income-tax (Systems) or the Director-General of Income-tax
(Systems) shall specify the procedures, formats, and standards for the purposes of uploading of annual information statement referred to in sub-rule (1).”