As proposed in the Union Budget 2020, the Annual Information Statement (AIS) will be replacing Form 26AS. The AIS will provide details of a taxpayer’s financial transactions including the property details, the status of shares possessed, mutual fund transactions along with TDS and TCS information. It helps to promote transparency and encourages tax evasion measures.
Form 26AS is an annual consolidated credit statement issued by the Income Tax Department to support the taxpayer cross-verify details of income earned, tax deducted and deposited.
The new Annual Information Statement
AIS will contain data existing in Form 26AS along with information on capital gains, losses, shares, and mutual fund transactions.
Section 23AA is to be replaced with Section 85BB per another amendment to be effective from June 01, 2020. This will allow the concerned income tax authority to upload the Annual Information Statement in the registered account of the assessee, within such time and along with such information, which is in the possession of an income tax authority, as may be prescribed.
AIS will also include other financial information such as sale or purchase of immovable property and shares in the 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 introduction of the AIS should thus encourage information exchange between the taxpayer and tax authorities while improving transparency and encouraging taxpayers to come out and disclose in greater numbers.