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Form 26AS is one of the most important documents for taxpayers. Here's everything you need to know about its different sections to filing returns with the form.

A dummy's guide to Form 26AS

Here is a question: Assuming your employer (or a company or person for whom you have done some freelance work) makes some deductions from your emoluments as TDS/TCS (tax deducted/collected at source) and claims to deposit the amount against your name with the Income Tax department, how will you know if they have actually done so?

Actually, this should not pose a major problem. You can always find out by checking Form 26AS of the Income Tax department, which contains details of all taxes deducted and collected from the taxpayer, and shown against the person’s PAN (Permanent Account Number).

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So is Form 26AS essentially meant for tracking tax deductions?

Form 26AS is more than a tool to track tax deductions. It is a consolidated statement that contains details of all income – such as your salary, the interest on your bank deposits etc, as well as the total tax deducted on it and deposited in your name with the IT department. Therefore, it is also called the taxpayer’s Annual Statement (AS). Needless to say, only legal income is reflected in the form.

Sometimes taxes are calculated and deposited by taxpayers on their own (small businesses, professionals etc.). Advance tax, self-assessment tax, regular assessment tax etc. fall under this category. This too is reflected in Form 26AS.

Form 26AS also contains details of refunds received by the taxpayer during a financial year. In this connection, please note that the IT department allows a taxpayer to claim tax credits as reflected in their Form 26AS, which shows TDS (by customers/employers/others) against payments received. This means you can claim the credit reflected in the form against the taxes payable for that assessment year.

Form 26AS also helps the IT department keep a tab on incomes other than refunds and regular sources such as the monthly salary. These may result from transactions such as a sale of property or mutual fund investments. This is reflected in Form 26AS because banks and other authorities are required to report such transactions to the IT department through the Annual Information Return (AIR).

In effect, Form 26AS is a database maintained by the IT department of the total income and tax paid by taxpayers. So much so that your address shown in Form 26AS would have been picked up from the PAN database with the details of latest PAN card issued to you. Thus, the IT department can provide you with any data related to your tax status if the need arises.

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How does one locate the required data in Form 26AS?

The Annual Tax Statement (Form 26AS) is divided into several parts, with TDS/TCS found in Parts A, A1 and B. It is this data that should be verified before claiming tax credits. The various categories are explained below:

PART A: This section shows TDS from salaries, pensions, and bank interest.

PART A1: This section deals with transactions with financial institutions such as banks, where the taxpayer has submitted Form 15G/15H (to request the income provider not to deduct tax as TDS). There is no TDS in these cases, and this section helps you track untaxed interest gains. A taxpayer has to meet certain conditions, such as old age, to file Form 15G/15H. The conditions can be seen here.

PART B: This section contains details of TCS collected from the buyer of a specified category of goods (such as alcoholic drinks, scrap, parking fees, tolls etc); TCS rates vary for each category of goods.

These sections aside, there are also Parts C, D, and E, which deal with non-TDS/TCS issues.

PART C: This section contains details of tax paid other than TDS or TCS, such as advance tax or self-assessment tax payable directly to the banks, which uploads the information when your cheque is cleared.

PART D: Tax refund in an assessment year is listed under this section.

PART E: This contains details of AIR transactions.

What does Status of Booking mean in Form 26AS?

Parts A or B also shows Status of Booking, which refers to where your TDS stands with the IT authorities – in other words, whether the amounts claimed to have been deducted have actually been deposited or not. This status is depicted by F, O, U, or P.

F (Final): The status is marked F when the TDS/TCS deposited in banks by deductors match the details mentioned in the TDS/TCS statement filed by the deductor. This is the ideal status.

O (Overbooked): The status is shown as O when the amount claimed is larger than the actual TDS/TCS deposited in the bank.

U (Unmatched): This status appears when payment details mentioned in the deductor’s statement cannot be matched with deposit records in the banks.

P (Provisionally matched): Sometimes the mismatch happens with filings by government deductors; in such cases, the status is updated as Provisionally matched (P).

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How frequently is Form 26AS updated, and how does one check his or her annual statement?

Form 26AS is a live document that is updated upon every transaction, barring TDS or deposit or processing of self-assessment tax or advance tax for the given financial year. For TDS/TCS, the entities and persons deducting/collecting tax are required under the IT Act to file their statements every quarter.

A dummy's guide to Form 26AS

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You have to approach the person or company making the deduction and go over the data entered. If you aren’t satisfied with their response, you can approach the Income Tax Officer of your area with your grievance.

Here are the 2 ways to access your form 26AS

1. TRACES portal

If you are a registered PAN holder, you can view your Form 26AS on TRACES (TDS Reconciliation Analysis and Correction Enabling System) of the IT department, and match this with the data entered by the deductor. TRACES also enables online correction of already filed TDS returns.

Here how you can access your traces account:

Step 1: Visit http://contents.tdscpc.gov.in/en/home.html and then click on the continue button that appears on the pop-up

Step 2: Click on 'Login' that you see on the top left of the navigation bar

Step 3: A new page will open and you will have to enter your login credentials

2. Netbanking:

You can also view your Tax Credit Statement or Form 26As via netbanking, provided you are PAN holder and have netbanking activated with any authorised banks. 

If you haven’t registered, log in to the IT department’s website www.incometaxindia.gov.in and register yourself. Then log in and click on the ‘My Account’ tab, which will show the ‘View Tax Credit Statement’ option. Here you can click on Form 26AS.

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Can I file IT returns using Form 26AS statement?

Form 26AS is an important document for filing IT returns as it contains details of all your tax deductions, based on which you can claim tax credits. But it is not the only one, as it does not contain all the information required for filing returns. Moreover, an assessee’s income cannot be accurately fixed on the basis of Form 26AS as the taxpayer may have income from other sources on which tax has not been deducted. Therefore, it is not advisable to prepare and submit tax returns only on the basis of Form 26AS.

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.

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