Last Updated on July 27, 2020 at 3:22 pm
Recently, the Income Tax Department introduced some key changes in Form 26AS. What used to be a simple tax credit statement available to every taxpayer is now a complete blueprint of your high-value financial transactions. What are the new changes in form 26AS? Will they help the taxpayer?
About the author: Anjesh Bharatiya is a 30+ taxman by profession and a Chemical Engineer by education. He has been an investor in the stock market since age 15! He likes to write about personal finance, stock markets, government policies, taxation, philosophy and football.
Also by Anjesh: (1) Want to trade in stocks? Here is how your income will be taxed. (2) How to use Tax benefits on HRA and home loans (3) How to get tax benefits under a Hindu Undivided Family (HUF)
🔥Secure your future with our Robo-advisory tool trusted by over 3,500 investors and advisors. From effortless retirement planning to funding your children’s biggest dreams, turn your financial goals into reality. 🔥
Subscribe for money management solutions via email! (Link takes you to our email sign-up form) Join 32,000+ readers in our community.
👉 New Tool Alert! NaviPlan: A Privacy-Focused Multi-asset Tracker and Goal Planner 👈
Financial information that is available exclusively to the Income Tax Department will now be displayed in the Form 26AS so that the taxpayer can properly account for his transactions before filing his return of income. This is likely to increase transparency between the Department & the taxpayer and if utilized correctly by the taxpayer, will also result in minimizing the likelihood of the taxpayer receiving any notice or adversarial communication from the Department. Let’s have a look at the new information that will now be available in your Form 26AS:
New information and parts of the new Form 26AS
The Income Tax Department receives various specified high-value transactional information from various sources like Banks, Mutual Funds and other such Financial Institutions. This information, called as Statement of Financial Transactions (SFTs), will now be displayed in the new Form 26AS. The new Form 26AS has the following changed sections and new information:
- Part A2: This section used to have details of tax deducted at source on sale of immovable property u/s 194IA/ TDS on rent of property u/s 194IB (for seller/landlord of property). Now this section will also include details of TDS deducted if you have received income from contractor business and any profession. No information will be available if no TDS was deducted.
- Part E: This section has been renamed to “Details of SFT Transaction”. Earlier, this part used to display AIR Information which was also related to high value transactions but did not include all types of financial transactions. The SFT Transactions are much more comprehensive and include the following 14 types:
SFT- 001: Purchase of bank drafts or pay orders in cash (if more than Rs 10 lakh in a year)
SFT- 002: Purchase of pre-paid instruments in cash (if more than Rs 10 lakh in a year)
SFT- 003: Cash deposit in the current account (if more than Rs 50 lakh in a year). This includes deposits through bearer cheques. It also includes cash withdrawals aggregating to Rs 50 lakh or more.
SFT- 004: Cash deposit in account other than current account (if more than Rs 10 lakh in a year). This includes deposits through bearer cheques.
SFT- 005: Time deposit (if more than Rs 10 lakh in a year). This includes sweep-in/sweep-out fixed deposits. Each time a new sweep-in FD is created, the system records it as a new time deposit. So, don’t be alarmed if you see a very large value under this code in your Form 26AS.
SFT- 006: Payment for credit card (if more than Rs 10 lakh in a year through non-cash methods. Limit is Rs 1 lakh for cash payments)
SFT- 007: Purchase of debentures (if more than Rs 10 lakh in a year)
SFT- 008: Purchase of shares (if more than Rs 10 lakh in a year)
SFT- 009: Buyback of shares (if the tendered value is more than Rs 10 lakh in a year)
SFT- 010: Purchase of mutual fund units (if more than Rs 10 lakh in a year)
SFT- 011: Purchase of foreign currency (if more than Rs 10 lakh in a year)
SFT- 012: Purchase or sale of immovable property (if more than Rs 30 lakh in a year). Even if you purchased/sold the property for less than Rs 30 lakh but the value by stamp valuation authority was Rs 30 lakh or more, the higher value will be displayed here. Please note that even if you sell a property below Stamp Duty Value, sale consideration for the purpose of calculating capital gains will be the Stamp Duty Value (unless the Stamp Duty Value is less than 110% of the consideration received). Even for the buyer, if he purchases a property below Stamp Duty Value such that the Stamp Duty Value exceeds the amount paid by 10% or Rs 50,000 (whichever is higher), the difference will be taxed as “Income from other sources”. Therefore, it is always advisable to sell/buy immovable property at least at the Stamp Duty Value.
SFT- 013: Cash payment for goods and services (if more than Rs 2 lakh in a year)
SFT- 014: Cash deposits during a specified period of 9th Nov to 30th Dec 2016 (if more than Rs 12.5 lakh in a current account or Rs 2.5 lakh in other accounts)
The following details will be available in Part E regarding the above transactions:
- Type of transaction
- Name of SFT filer
- Date of transaction
- Single/joint party transaction
- Number of parties
- Amount
- Mode of payment
- Part F: This part is analogous to Part A2 mentioned above and refers to the same transactions from the buyer’s/payer’s side. It used to have details of tax deducted at source on sale of immovable property u/s 194IA/ TDS on rent of property u/s 194IB (for buyer/tenant of property). Now this section will also include details of TDS deducted if you have made payment to any contractor or any professional.
Final word: The revamped Form 26AS is another move by the Income Tax Department to facilitate the taxpayers and avoid any unnecessary proceedings. To be clear, the Income Tax Department already used to have all the specified information. The only thing that changes is that now the assessee can view the information in a consolidated manner. The Department already issues notices to people whose transactions and income don’t match. However, the taxpayer now has an opportunity to properly reflect these transactions in his return of income. If the transactions match your financial profile and income tax returns filed, then an honest taxpayer need not have any worries.
We are on Google News
Use this button to add freefincal.com as a preferred personal finance source on Google News. 
Add freefincal as a preferred news source
You can also follow freefincal on Google News. 
Explore 1,000+ videos on YouTube!
Subscribe to get posts via email!
Join 32,000+ readers and get free money management solutions delivered to your inbox! (Link takes you to our email sign-up form)Join our WhatsApp Channel
Explore our products
🔥Join our community of 9000+ users! 🔥 Use our Robo-advisory Tool to create a complete financial plan! More than 3,500 investors and advisors use this! Use the discount code robo25 for 20% off. Plan your retirement (early, normal, before, and after), plus non-recurring financial goals (such as child education) and recurring financial goals (such as holidays and appliance purchases). The tool helps anyone aged 18 to 80 plan for retirement, plus six non-recurring and four recurring financial goals, with a detailed cash flow summary. Our Flagship Course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,500 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market conditions! Watch the first lecture for free! One-time payment! No recurring fees! Lifelong access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence. Join the freefincal investor circle! An exclusive space for investors, advisors, fintech employees and students to access financial planning and insurance tools, mutual fund and stock analysis tools, coding strategies and Excel macros for data extraction. 750+ members are now part of our investor circle. Increase your income by getting people to pay for your skills! More than 900 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner seeking more clients through online visibility, or a salaried individual looking for side or passive income, we will show you how to do it by showcasing your skills and building a community that trusts and pays you. (Watch the 1st lecture for free). One-time payment! No recurring fees! Lifelong access to videos! Track your mutual funds and stock investments with our Google Sheet! We also publish monthly screeners for- Equity mutual funds
- Debt and hybrid mutual funds
- Index funds
- ETFs
- Momentum and low-volatility stock screeners
Our Podcast: Let's Get Rich With Pattu
On Spotify: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth!
Audible Link: Listen to the Let's Get Rich with Pattu Podcast
You can also watch podcast episodes on the OfSpin Media Friends YouTube Channel
Listen to the Let's Get Rich With Pattu podcast on YouTube.
Now watch Let's Get Rich With Pattu தமிழில் (in Tamil)!About The Author
Dr M Pattabiraman giving a lecture
Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over 14 years of experience publishing news analysis, research and financial product development. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free, AUM-independent investment advice. Connect with him via Twitter(X) LinkedIn YouTube Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (Published by CNBC TV18) for DIY investors. 
This book helps you ask the right questions and find the right answers. It also includes nine online calculators to create custom solutions.
(2) Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want. 
Both the boy and girl versions of "Chinchu Gets a Superpower".
Most investor problems stem from a lack of poor decision-making. We made bad decisions and money mistakes when we started earning, and we spent years undoing them. Why should our children go through the same pain? What is this book about? As parents, what if we had to groom one ability in our children that matters not only for money management and investing but for every aspect of life? My answer: Sound decision-making. So, in this book, we meet Chinchu, who is about to turn 10. The story follows what he wants for his birthday and how his parents plan it, while also teaching him key ideas about decision-making and money management. What readers say! 
Feedback from a young reader after reading Chinchu Gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from a young age. The importance of money management and decision-making based on their wants and needs. Very nicely written in simple terms. - Arun.
About freefincal & its content policy
Freefincal is a News Media organisation dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact Information: To get in touch, please use our contact form. (Sponsored posts or paid collaborations will not be entertained.)Our publications
Your Ultimate Guide to Travel
