Explained: How to file your computer returns using the new annual information system
The Income Tax Service has implemented a new Annual Information Declaration (AIS), which includes additional categories of information. With this, the ministry is expanding the list of high value transactions covered so far by Form 26AS – which will remain in use until the new AIS becomes fully operational.
What is AIS and how will it help you?
Currently, the 26AS form is detailed by the tax service, which is a consolidated annual tax return that includes information on withholding / levied tax, withholding tax and self-assessment. It is available on the Income Tax website against a taxpayer’s Permanent Account Number (PAN). The 2020-2021 budget announced the revised Form 26AS, giving a more complete profile of the taxpayer, going beyond the details of the tax collected and withheld at source.
The revised AIS includes categories of additional information – on interest, dividends, securities transactions, mutual fund transactions and remittances from abroad, as well as information on many other transactions. currently available from the Income Tax Department. “There may be other transactions relating to the taxpayer that are not currently displayed in the AIS,” the IT department said.
Will Form 26A cease to exist now?
The 26AS form will continue to exist on the TRACES portal until the new AIS is validated and is fully operational, the ministry said. In May of last year, the ministry notified the new AIS in Form 26AS, effective June 1, 2020. The revised Form 26AS included all the details provided by banks and financial institutions, which were previously recorded in their statement of financial transactions (SFT). .
On October 26, the Central Commission for Direct Taxes (CBDT) issued an order under Section 285BB of the Income Tax Act to expand the scope of transactions to be reported under Form 26AS. Additional categories include overseas remittances made by anyone through an authorized reseller, salary break with deductions claimed by the employee, information in tax returns from other taxpayers, interest on income tax refunds, information published in SFTs as well as off-market transactions. declared by the custodian / registrar and transfer agent (RTA), and information on dividends and mutual fund purchases declared by the RTA.
What should taxpayers do now?
The new AIS can be accessed by clicking on “Annual Information Return (AIS)” under the “Services” tab on the new electronic income tax reporting portal (revenutax.gov.in).
If the taxpayer believes the information is incorrect, pertains to another person / year, is a duplicate, etc., a function has been provided to submit comments online. Feedback can also be provided by submitting multiple pieces of information in bulk. An AIS utility has also been provided for taxpayers to view their AIS and download their comments offline.
The reported value and the value after feedback will be displayed separately in the AIS. In case of modification / refusal of information, the source of the information can be contacted for confirmation.
Do taxpayers have reason to be concerned?
Taxpayers simply need to carefully check all transactions reflected in the AIS, so that the correct information is then reflected in their returns. With the revised AIS, most transactions are now the responsibility of the IT department. The ministry said it also has access to information beyond what is shown in the AIS, which will help tax authorities assess a taxpayer’s profile comprehensively and reduce the scope of the escape. The department has provided the convenience of feedback, which will ensure any anomalies are corrected before a taxpayer files their returns. The ability to submit comments online will help remove all duplicate and incorrect transactions.
A Simplified Taxpayer Information Summary (TIS) has also been generated for each taxpayer, which shows the aggregated value for the taxpayer to facilitate filing returns.
If the taxpayer submits comments on the AIS, the information derived in TIS will be automatically updated in real time and this information will be used for the pre-filing of returns. The pre-filling will be activated gradually. Taxpayers have been advised to verify all related information and to report complete and correct information on their tax returns.
From when is it applicable? What about those who have already filed their declaration?
Taxpayers should consult the information displayed in the AIS and provide comments if the information needs to be changed for returns to be filed this year. The value indicated in the TIS must be taken into account when filing the RTI. If the RTI has already been filed and some information was not included, the statement may be revised to reflect the correct information, the IT department said.
If there is any difference between the TDS / TCS information or the details of the tax paid as shown in the 26AS form on the TRACES portal, and the TDS / TCS information or the tax payment information as displayed in the ‘AIS on the compliance portal, the taxpayer should rely on information posted on the TRACES portal to file their ITRs and for other tax compliance purposes, the ministry said.