To curb tax evasion, and bring transparency, the Budget 2020 proposed to replace Form 26AS with a new Annual Financial Statement (AFS) that will include details of taxpayers' property, shares possessed and mutual fund transactions along with tax deducted at source (TDS) information.
At present, Form 26AS shows details of TDS and other prepaid taxes paid to the government against one's PAN (Permanent Account Number), as per Section 203AA. It is accessible on the income tax department's website for reference.
The Union Budget for financial year 2020-21 has proposed the introduction of Section 285BB, which will require the Central Board of Direct Taxes (CBDT) to provide a comprehensive Annual Financial Statement that will include details on important financial transactions undertaken by an individual in a particular year like sale or purchase of property, shares, etc, that are mentioned in one's income tax returns (ITR).
"Such statement will also include other financial information such as sale or purchase of immovable property and shares in possession of the income-tax authority. Consequently, Section 203AA will be deleted and Form 26AS will be replaced by the comprehensive annual information statement," the Finance Bill said.
The format of this new financial statement is yet to be notified by the government. The proposed amendment will be effective from 1 June 2020.
After the change, mutual fund houses, banks and depositories will have to provide details of transactions made against a PAN in a financial year to the Income Tax Department.