Budget 2020 introduced to replace Form 26AS with a new Annual Financial Statement in order to prevent tax evasion and bring clarity among taxpayers
This will include details such as:-
- Taxpayers Property
- Shares possessed
- Mutual fund transactions &
- Tax deducted at source (TDS) information.
As per Section 203AA, Form 26AS currently provides details of TDS and other prepaid taxes that are paid to the government against one’s PAN (Permanent Account Number) and it is available for verification on the website of the income tax department.
The budget for the financial year 2020-21 implemented the introduction of Section 285BB. As per the agreed contours, the idea is to include a detailed financial statement comprising of all important financial transactions conducted by an individual in a particular year, such as
- Sale or Purchase of Property &
- Sale or Purchase of Securities
to be reflected in the prepopulated ITR’s or Income tax Return.
Annual Finance Statement will also include other financial information such as
- Sale or purchase of immovable property
- Stock or shares held by Income tax authority.
Therefore, Section 203AA will be deleted and Form 26AS will be replaced by Annual Finance Statement.
The State has yet to inform the specification of this new financial statement. The proposed amendment is set to take effect from 1 June 2020.
Once this amendment is ther through there will be a big change for banks and mutuals funds as they would have to share all the details on transactions being conducted by individuals during the year related to a particular PAN no. or Aadhar NO.