The Government of India has announced measures for collection and compilation of information relating to the transactions of a taxpayer. The information collected would be posted in the taxpayer’s registered login with the income tax department. The budget proposes to introduce an annual information statement compiling the transactions of a taxpayer.
The budget 2020 seeks to streamline the process of income tax return filing and bring into account the various transactions of a taxpayer. The budget has brought in remittances made outside India, purchase of foreign tour package, and e-commerce business transactions into the tax fold. The scope of TDS (tax deducted at source) and TCS (tax collected at source) provisions have been widened to capture all the above transactions under the income tax law.
A person making payments for different transactions such as payment of salary, interest, work contract, rent, professional services, and so on are required to submit quarterly TDS, and TCS returns. Similarly, there are specific TDS returns for payment for immovable property and other transactions. The transactions reported in the TDS and TCS returns are in an annual TDS statement called Form 26AS. The Form 26AS is taxpayer specific and stored in the taxpayer’s login with the income tax department.
The budget 2020 seeks to replace the annual TDS statement in Form 26AS with an Annual Information Statement (AIS). The AIS is likely to include capital market transactions consisting of purchase and sale of shares and mutual funds, and other high-value transactions. The AIS will come into effect from 1 June 2020.
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I am a Chartered Accountant by profession. I specialise in personal taxes and corporate income tax matters. I am an avid reader and track developments in financial markets, economy and other market developments.