Income tax law and rules state that every individual, organisation or business that makes a payment to another individual, organisation or business (party) for services rendered by the said party has to pay to the Government of India a tax amount that has been deducted from the payment due to the party. This deducted amount is called Tax Deducted at Source (TDS).
For instance, TDS is deducted every month from the employee’s salary by the employer and paid to the government on a quarterly basis, i.e. four times a year. The Income Tax Department maintains a record of the tax paid by the payers. TDS is also deducted on other types of income generated by a taxpayer. If the tax deducted for a taxpayer is higher than his or her tax liability for a financial year, then he or she can file for a refund when they submit their income tax return. Form 26AS plays an important role in keeping all of the tax-related records of a taxpayer.
Form 26AS, also known as Annual Statement, is a consolidated statement that keeps a record of all the tax-related information such as TDS, TCS, and refund etc. associated with a PAN card. Form 26AS contains the annual tax statement under the Section 203AA, Rule 31AB of the Income Tax Act, 1961.
This statement reveals the tax amount that has been received by the government and also contains consolidated information about all of your income sources including your monthly salary, pension, income from investments, income for professional services, etc.
Form 26AS: Purpose
Form 26AS is considered as an important financial document since it contains all the tax-related statements. The major purposes that Form 26AS fulfils are:
- It helps check if the deductor has accurately filed the TDS statement or the collector has accurately filed the TCS giving details of the tax deducted or collected on your behalf.
- It enables one to check that the tax deducted or collected by the deductor or collector respectively has been deposited to the account of the government on time.
- It helps verify the tax credits and computation of income before filing the income tax return.
Apart from this, the form also reflects details of the Annual Information Return (AIR), which is filed by different entities based on what an individual has invested or spent on, mostly for high-value transactions. If the total amount deposited in a savings account exceeds Rs. 10 lakh, the bank will send an AIR. The same holds true if more than Rs. 2 lakh is invested in a mutual fund or spent on a credit card.
Form 26AS tends to serve both the citizen and the government. An income taxpayer is no longer required to attach a photocopy of the TDS certificate along with Income Tax Return as long as he or she has Form 26AS. The Income Tax Department will allow a taxpayer to claim the credit of taxes as reflected in his or her Form 26AS if no other payments are due from him or her as income tax (or interest thereon) payable to the Government.
Here is an example to illustrate how Form 26AS helps. Suppose Mr. Narayan wants pays his annual income tax for his yearly salary of Rs. 4.8 lakh (Rs. 40,000 per month) and income of Rs. 2 lakh from other sources. Though his Form 16 tells him how much tax has been deducted by his employer, he has no idea of how much tax has been deducted from his other income by the payer.
However, all details of the Tax Deducted at Source (TDS) will be reflected in his Form 26AS that can be viewed on the Income Tax Department website. The form will show the tax paid on his behalf by his employer as TDS as well any TDS deductions made by the payer of other income. This form will contain a quarterly account of the taxes paid on behalf of Mr. Narayan, and he will know exactly whether he needs to pay any more income tax or whether he is eligible for a refund.
Form 26AS is divided into
Form 26AS: Structure
Form 26AS for each financial assessment year is divided into multiple parts. The tax credits appearing in Part A, A1, and B in Form 26AS are given on the basis of details furnished by the deductor/collector in the TDS/TCS statement filed by them. Brief details of the sections are provided below:
Part A: Part A of the Form 26AS contains details of the Tax Deducted at Source (TDS) in Indian currency (INR). This section of the form exclusively highlights the TDS deducted from your salary/pension income as well as TDS deducted by the banks on the interest generated from your investments.
Part A1: This section of the Form 26AS is specially kept for the details of tax deducted at source (TDS) from Form 15G/15H. This portion of the form shows transactions in financial institutions such as banks where the individual has submitted Form 15G/15H. TDS, in these cases, would be zero because the individual has already submitted Form 15G/15H to the institution concerned, and they would not deduct any tax based on the information in this form. This section also enables you to keep a track of the earned interest that has not been taxed.
Part B: This section of Form 26AS is kept for the details of the Tax Collected at Source (TCS). This tax is collected by the seller from the buyer at the time of sale of specified category of goods (such as liquor, parking lot, toll plaza, etc.) The amount is deposited by the collector to the government on a quarterly basis.
Part C: Form 26AS Part C discusses and maintains the details of tax paid other than TDS or TCS. If you have paid advance tax or self-assessment tax, it will be listed here. Whenever you deposit advance tax /self-assessment tax directly to the bank, it will upload this information within three days after the cheque has been cleared.
Part D: This part of the Form 26AS keeps the details of paid refunds. All the refunds that you have applied for and received will be listed under this section of the annual tax statement. It may be helpful to keep a track of this information to check if you have been paid for all of the tax refunds you have applied for.
Part E: The Part E of the Form 26AS is responsible for keeping the details of the Annual Information Return (AIR) transactions. If you make some high-value transactions, such as a purchase of property, investment in mutual funds, etc., these transactions are automatically reported to the Income Tax Department by banks and other authorities through the AIR.
Form 26AS: Availability
It is easy to access and download Form 26AS. Here are a few ways to do so:
- Download Form 26AS by logging in to your income tax filing account directly on The Income Tax Department e-filing website at https://incometaxindiaefiling.gov.in. Once you log in, click on ‘View Form 26AS (Tax Credit)’ button, either under the ‘My Account’ or ‘Quick Links’ section. You will be redirected to the TDS-CPC website to view and download your Form 26AS. You need to choose the relevant Assessment Year (AY) for which you want to download the statement. It is issued on behalf of the Income Tax Department and has the heading ‘TDS Reconciliation Analysis and Correction Enabling System.’ This is the best way to find Form 26AS and all information related to it.
- Another easy way to download Form 26AS is by registering at the TDS Reconciliation Analysis and Correction Enabling System (TRACES) of the Income Tax Department. It comes in the right format and is easy to read.
You can also get this form through authorised banks using their net banking facility. However, Tax Credit Statement (Form 26AS) is available only if the PAN is mapped to the bank account that is going to be used to download the form. The facility is available free of cost. The list of authorised banks that provide the form are given below:
|Allahabad Bank||ICICI Bank||State Bank of Hyderabad|
|Andhra Bank||IDBI Bank||State Bank of India|
|Axis Bank||Indian Bank||State Bank of Mysore|
|Bank of Baroda||Indian Overseas Bank||State Bank of Patiala|
|Bank of India||IndusInd Bank||State Bank of Travancore|
|Bank of Maharashtra||Karnataka Bank||Syndicate Bank|
|Canara Bank||Kotak Mahindra Bank||Federal Bank|
|Central Bank of India||Oriental Bank of Commerce||Karur Vysya Bank|
|City Union Bank||Punjab National Bank||UCO Bank|
|Corporation Bank (Retail)||Punjab & Sind Bank||Union Bank of India|
|Corporation Bank (Corporate)||South Indian Bank||Vijaya Bank|
|Dena Bank||State Bank of Bikaner & Jaipur||Yes Bank|
The form besides cross-checking the income tax related data serves another purpose as well – you need it to file your income tax return. Form 26AS contains consolidated details of your deductors and collectors including their names, tax deduction account numbers, tax collection account numbers, the amount of income received, and Tax Deducted at Source (TDS), etc. The form makes it quite easy for you to fill in the data while you are filing your return.
Most people are already aware of the importance of Form 26AS. Here are a few reasons why you need it:
- Form 26AS gives the information as tax deducted/collected by the deductor/collector has been deposited to the government.
- This form enables you to access all of the financial transactions involving TDS/TCS during the relevant financial year at once.
- The form also helps in claiming the tax credits and computation of income at the time of filing of return of income. It can help you verify your income tax return easily. If, somehow, the tax entries do not match then the income tax department sends a notice immediately.
- Seamless processing of income tax return and speedy credits of fund is also possible with the help of form 26AS.
- Verification of refunds can be encashed during the Financial Year (FY) using Form 26AS.
Form 26AS must be cross-checked and verified with the details of TDS certificate, also known as Form 16 (salaried) and Form 16A (non-salaried), to make sure that the TDS deducted from the payee’s income was actually deposited with the income tax department.
Other things that must be verified in the TDS certificate with Form 26AS are discussed here:
- Do not forget to check your name, PAN, Deductor’s TAN, refund amount paid to you, and TDS amount on Form 26AS to make sure that they are correctly reflected. These are significant numbers and, as such, it is important to confirm the figures before you accept the certificate. Any mismatch here can create a lot of problems when you file your income tax return.
- Verify that your Tax Deducted at Source (TDS), as shown in the TDS certificate, has actually been received by the government. This is only possible by comparing it with Form 26AS. If the deductor has failed to file TDS or submit the tax on your behalf, it can be an issue for both of you. Contact the deductor and ask him to file the TDS return and submit the tax amount at the earliest.
- You must also check that the TDS mentioned in Form 16/16A is reflecting in Form 26AS correctly. If the TDS shown in your TDS certificate is not reflecting in your Form 26AS, it would imply that the deductor has deducted the tax on your behalf but has not deposited TDS to the Income Tax Department. You need to take action promptly by contacting the concerned deductor if you face this issue.
In case of any kind of discrepancy between the TDS certificates and Form 26AS, inform your deductor and ask for the reasons for this discrepancy and get it corrected as soon as possible. Make sure the deductor has filed TDS using your PAN number and other details. In a lot of cases, if the TDS is filed under an incorrect PAN, it can result in a lot of problems for both the deductor and the payee.
A lot of people wonder why they need a TDS certificate when they already have that information in Form 26AS. In reality, both of them serve their own purposes and are required in their own right.
It is true that you can gather all of the relevant information related to TDS in Form 26AS which is more than sufficient to file any income tax return. However, you cannot doubt the significance of a TDS Certificate. The rationale behind introducing Form 26AS is to enable the taxpayer to cross-check and thoroughly verify the details mentioned in his TDS certificates with those mentioned in Form 26AS and maintain transparency of information.
If you do not have a TDS certificate or Form 26AS, you will not be able to verify your details and find any mismatch that might have occurred. If you have both, you can compare the details and cross-check. In the case of a discrepancy, you can easily get it corrected.
Further, in the case of salaried persons, Form 26AS in itself is not sufficient to file the income tax return since it does not show the breakup of your income and details of deductions claimed under section 80C to 80U which are available in Form 16. Therefore, you need a TDS certificate in addition to Form 26AS.