The Income Tax Department of India maintains a statement under the form 26AS containing the details of Tax Credit in the account of a taxpayer as per the records of the department. It is mandatory to prepare traces form 26AS under the Rule 31AB of Income Tax Act, 1961.
There are three ways through which an individual can pay the income tax namely, TDS (Tax Deducted at Source), TCS (Tax Collected at source) or Advance Tax.
Only one can be used to pay the taxes. The total tax paid is recorded by the Income Tax Department as Tax Credit. Tax Credit can be collected only through TDS, TCS or Advance Tax.
The tax claimed by the taxpayer can be collected by him as per traces form 26AS.
In case of difference between the actual and stated TDS, the taxpayer can not claim the TDS
of the actual amount. The discrepancy can occur due to the following reasons:
In this case, the taxpayer should approach the deductor and request him to take necessarysteps for the rectification of the TDS. The deductor may file the correct TDS/TCS or submit a correction statement for the same.
Information in respect of specified financial transactions which include,
What’s interesting to note is that, information on this form will not be a one-time affair at year end. This will be a live 26AS, which can be updated regularly, within 3 months from the end of the month in which such information is received.
This implies that Banks , Financial institutions or any other Authority etc. while carrying out due diligence of the person/ corporate concerned will now ask for Form 26AS so as to know about the transactions of an individual or corporate. In future, all your financial transactions in India are transparent with the Government.