Understanding Income Tax Form 26AS in Detail
Form 26AS, in simple words, is a detailed ledger of all the TDS deductions in your PAN account. Tax Information Network or TIN generates individual Form 26AS for every PAN. The TIN portal receives the TDS information from two sources and combines those details to create this comprehensive Form 26AS ledger.
The first source is banks. The payer has to deduct TDS for all payments of goods or services carried out. So, the payer becomes the Deductor of TDS. This Deductor has to pay this deducted TDS to the government via banks. Whenever a deductor pays TDS money to the government, the bank keeps a record of the payer and the PAN, and other details of the Deductee.
The second source is the Deductee. The Deductee has to file their TIN transactions of payment received after the TDS deduction every quarter. And finally, the TIN portal receives the TDS information from both sources, matches them, and creates a ledger that is accessible by the Deductee.
Contents of Form 26AS
There are different contents in Form 26AS according to the type of the person or company. But some contents remain common for all. Given below are the main sections of Income Tax Form 26AS.
Tax Deducted at Source
This section shows all your reported payments with TDS deductions. It will show all the eligible transactions with TDS deductions within the selected Assessment Year. A great feature of this section is that it shows subcategories of different payers who deducted TDS from your payment. So, if you have more than one employer or TDS deductible source, this section will have subcategories with each of their names.
Tax Deducted at Source for 15G/15H
If you don’t have an income exceeding the threshold of TDS, then you must submit a Form 15G or 15H to the bank or the respective deducting agency. These deductions are a common procedure for interests obtained from fixed deposits or other interest-yielding schemes at banks. The form is a sort of self-declaration that you don’t have a taxable income from all your combined income sources. You can obtain this form from the Regional Income Tax Office and submit it to your bank to prevent deductions.
This section of the TRACES portal shows all your TDS under Form 15G/15H. If your documents are in order, you will get a full refund of all of the money deducted in this particular section.
TDS for sale of immovable properties by seller
This section shows all your TDS debited while selling immovable properties like land or structures. The buyer has to deduct TDS from the payment of property and has to give the seller only the remaining amount after deductions. The buyer will have to file the TDS in their PAN and ITR. And the seller’s TRACES portal will show the TDS deduction in this section.
Tax Collected at Source
This section shows all the TCS by you. Similar to the TDS section, this section also has subcategories according to separate sources.
Taxes Paid as advance or self-assessment tax other than TDS and TCS
This section shows all the taxes you paid before or during the financial year as advance taxes. If you paid any extra amount, it would show as a credit, and if you paid less, it would show as a debit. The TRACES portal considers this amount while calculating the final actual payable taxes as TDS.
This section will show all the refunds you received in TDS. It will also show the tax refunds you will get from the previous TDS 15G/15H section.
AIR (Annual Information Return) Transactions
AIR transactions are generally known as transactions of high value. They are applicable only on specific occasions for specific people.
You can view Form 26AS in your account in the TRACES portal. You can cross-verify all the details of your TDS records. Sometimes there are chances of mistakes in the final amount due to some common mistakes. Given below are some common errors that you can avoid and change in Form 26AS.
Common Errors in Form 26AS
Errors in Form 26AS generally occur due to the huge number of people involved in filling in details at various stages. The TIN portal receives forwarded details from various Deductors, Banks, Deductees, and other PAN and personal identification sources. So, chances of mistakes in names, numbers, account details can easily get mixed up. Given below are some common mistakes that occur in Form 26AS.
Final Tax Amount
If you don’t have a lot of TDS transactions, the first thing you must verify is the final tax amount. PAN accounts with only a few TDS transactions can directly check the final amount instead of going through the troublesome verification of all particulars. Only proceed to verify particulars if you notice any mismatches in the tax amount.
Sometimes personal details like names, dates, or other important details can have mismatches. Verify all these details before going forward with Form 26AS submission.
PAN details are more important than personal details. The PAN is the only gateway to your Tax account. So always ensure the PAN details of all the participants are correct.
Corporate Identification Number or CIN is a necessary detail to identify incorporated businesses and organizations. If you have payments with TDS deductions from such incorporated companies with CIN, you must verify its accuracy.
According to different assessment years, there are different income tax slabs, rates, and thresholds. So, ensure to select the correct Assessment year to avoid any relaxations of the current year.
Revisions Of Income Tax Rules
You need to be aware of the timely revisions made to the Income Tax Act, 1961 that affect the tax rates and exemptions. By remaining up to date with the recent laws, you can gain the maximum relaxation in the tax amount.
Deductor’s Failure to Deposit TDS On Time
It would be best to look for any discrepancies in the list of TDS transactions because of Deductor’s fault. Due to a high number of transactions, sometimes the Deductor may mistakenly omit some transactions. You must bring this to the notice of the Deductor and change it in the TRACES portal.
Also, ensure that the PAN and TAN numbers of the Deductor are in order and don’t have any mistakes. The Deductor’s PAN or TAN is the only way to identify the Deductor through the TRACES portal.
TDS Returns and Rates
Ensure that the TDS returns and deductions are per the current TDS rates. See that your rate is in the correct category. The wrong category can increase your tax burden through TDS.
Sometimes there can be errors in the TDS deductions due to wrong entries. Ensure that all your TDS deductions are present in the Form 26AS of the TRACES portal.
After correcting all the mistakes, you have to send back Form 26AS into the TRACES portal. The portal will verify and approve your changes and send back a new Form 26AS. You have to file this new Form 26AS along with your ITR.
After verifying all these details, if you find any changes, file a change in the Income Tax Form 26AS. It is important to verify the personal and financial details of everyone included in the transactions. Any error will only cause further trouble in the future and financial loss. Incorrect TDS filing can also draw legal actions. So, ensure the correctness of every detail you submit in the portal.