In the Union Budget 2020, the finance minister has announced the new income tax clause section 285BB under which the existing form 26AS will no longer be available. In this article, we will discuss what is section 285BB and how will it affect you as a taxpayer.
Before we move ahead, let’s first understand what is form 26AS. The Form 26AS is the statement which is showing all the TDS deduction and TCS collection details in one statement. TDS (Tax Deducted at Source) is the amount usually employer is deducting from the salary and deposit it to the government.
The taxpayer can view all the TDS and TCS related details in a consolidated statement named as form 26AS from its official website Traces. The user has to log in with the PAN and password and can see the details of all the tax deducted at source in one place.
There are other details like TDS on property sale is also shown in the form of 26AS. All these details will not be available in the form 26AS as the same will be scrapped soon.
Users have to log in to the income tax website and in his profile, he can see the complete details about the income from all the sources. The new provision is declared as section 285BB.
This will be an annual income statement that will cover all the income from all the sources. Till now in Form 26AS, we were having only TDS and TCS related details which was not showing the complete picture of the income on an individual.
To overcome this issue, and to broaden the scope of the form 26AS this new section 285BB is introduced. Through this annual income statement, all the income from any of the sources will now be recorded and shown to the individual person in his/her income tax account.
These all transaction details will be available to you in your income tax portal so as to ensure that you are incorporating all the income from any of the sources.
For example, you have done a transaction of property sale during the financial year but you are not showing that in your income tax return. In this case, with the new section 285BB, this information now will be shown in your income statement and you have to declare it as your “income from other sources”.
The new section 285BB will be the extension of the existing form 26AS which will cover all the income and not just the TDS and TCS anymore.
The income tax department will already have all the information on your income-linked by your PAN and Aadhar card. The annual income statement will be available on the income tax portal. What will be the form number, when the same will be available – all these details will soon be available.
Once this annual income statement will be available on the portal, then the existing form 26AS will be discontinued. So section 285BB will be the new account statement for the taxpayer which will cover all the income of an individual.
The new amendment will take effect from 1st June 2020. So we can say that by that time the new income statement will be available on the income tax portal.
What will be the effect of section 285BB?
- The new section 285BB will replace the existing form 26AS
- All your income from any of the sources will be considered in the annual income statement
- You will have to pay the income tax on all the income you earned
- Income from the stock market, mutual fund, buy/sale of the property will also be included in the income statement
- Form 26AS will no longer be available
I will share more details on this subject as and when the same is available. For now, the crux is that from now onwards all your income will be reported as income and is liable to income tax payment.