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Mint
20 hours ago
- Business
- Mint
Income Tax: What are Form 16, AIS and 26AS? An explainer
Financial year 2024-25 has ended long ago and taxpayers are busy arranging necessary documents to be able to start the process of filing of income tax (I-T) return. When salaried taxpayers approach their chartered accountant for filing their income tax return, s/he typically asks him for form-16 which is a TDS certificate issued by the employer to employee. In other words, it is a statement that shows tax deducted by the employer on behalf of the employee. Aside from form 16, other documents which you need at the time of filing of income tax return are form 26AS which is a tax credit statement, and AIS which is a comprehensive view of information for a taxpayer displayed in form 26AS. Let us understand more about these documents in detail. Form 16: It is a TDS certificate issued by an employer to an employee. It is proof that the employer deposited the tax with the tax authorities. Form 26AS: It is a consolidated Annual Information Statement for a particular Financial Year (FY). It contains the details of Tax Deducted at Source (TDS), Tax Collected at Source (TCS), advance tax / self-assessment tax / regular assessment tax deposited, refund received during a financial year (if any), Details of any specified financial transactions (SFT), details of tax deducted on sale of immovable property under section 194 IA (in case of seller of such property), TDS defaults (if any), information relating to demand and refund and information relating to pending and completed proceedings. Annual Information Statement: AIS is a comprehensive view of information for a taxpayer displayed in Form 26AS. Taxpayers can provide feedback on information displayed in AIS. It shows both reported value and modified value (i.e. value after considering taxpayer feedback) under each section (i.e. TDS, SFT, Other information). AIS meets these purposes: 1. Shows complete information to the taxpayer with a provision to capture online feedback 2. Encourages voluntary compliance and enables prefilling of return For all personal finance updates, visit here.
India Today
26-05-2025
- Business
- India Today
Filing ITR for 2025? Here's why you must verify your AIS and Form 26AS first
The deadline to file your Income Tax Return (ITR) for the financial year 2024–25 is July 31, 2025. That may seem a while away, but starting early can help you avoid any last-minute mistakes or of the most important things you should do before filing your return is to check your Annual Information Statement (AIS) and Form 26AS. These documents contain details of your income and financial transactions during the year. If you forget to report something, you could end up receiving a notice from the tax ARE AIS AND FORM 26AS?Form 26AS is your tax credit statement. It lists tax deducted at source (TDS), TCS, property purchases, and large financial transactions made during the year. AIS is a more detailed version of this. It includes everything in Form 26AS plus additional details like interest earned on savings accounts, dividends, rent received, capital gains from shares or mutual funds, foreign transfers, and also allows you to give feedback if you find any mistakes or if something doesn't belong to TO ACCESS YOUR AISTo access your AIS, log in to the website using your PAN and the main menu, click on the 'Annual Information Statement (AIS)' option. Hit 'Proceed' and you'll be taken to the AIS portal. There, click on the AIS tile to see your go to the e-File menu, choose 'Income Tax Return', and select 'View AIS'.WHY YOU MUST REVIEW IT CAREFULLYBefore filing your return, go through your AIS and Form 26AS to make sure you've reported all your income. These records reflect your complete financial if you've sold shares, received rent, earned interest from deposits, or got a tax refund, it should all show up in the AIS. If you miss reporting any of these, the department could treat it as income not disclosed, and you might be sent a AN ERROR? HERE'S HOW TO FIX ITAIS has a built-in system to raise complaints or give feedback. If something looks wrong in Part B of your AIS, which shows income, TDS, and high-value transactions, here's what you can click on 'Bulk feedback', pick the incorrect item, and select your reason from the drop-down menu. Once you submit it, the department will review your feedback. If they agree with your explanation, they'll update the figures Watch
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Business Standard
21-05-2025
- Business
- Business Standard
ITR-U changes:Fix tax return errors of up to 4 years but with extra charges
To encourage voluntary compliance, the Central Board of Direct Taxes (CBDT) has notified an updated mechanism for filing income tax returns through ITR-U. Taxpayers now have up to 48 months from the end of the relevant assessment year to correct errors or omissions in previously filed returns, double the earlier 24-month period. However, this extended window comes at a cost. ITR-U is applicable to any individual or corporate entity that has omitted or misreported income, missed deductions, or failed to file returns altogether. What's new in the updated ITR-U? According to Ritika Nayyar, partner at Singhania & Co., the amended framework mandates filing the complete applicable ITR form along with ITR-U, as opposed to the earlier simplified standalone format. 'This includes comprehensive financial details beyond just the additional income,' Nayyar said. The additional tax is now levied progressively based on the delay: 25 per cent of tax and interest if filed within 12 months 50 per cent for 12–24 months 60 per cent for 24–36 months 70 per cent for 36–48 months Sandeep Bhalla, partner at Dhruva Advisors, added that taxpayers must also disclose the source of additional income, provide specific reasons for updating the return, and complete a more detailed verification process. Importantly, the form cannot be used to claim refunds or reduce existing tax liabilities. 'The aim is to regularise tax liabilities before detection by authorities. Penalties under ITR-U are significantly lower than those for tax evasion,' Nayyar noted. Bhalla highlighted that this facility offers a final chance to rectify inconsistencies, such as unreported interest, rental income, or capital gains, particularly if discrepancies appear in the Annual Information Statement (AIS) or Taxpayer Information Summary (TIS). Opportunity and limitations While the 48-month window offers flexibility, both experts cautioned against misuse. 'ITR-U cannot be filed if search or survey actions have been initiated, or in cases involving serious proceedings under laws like the PMLA or Benami Act,' Nayyar said. Taxpayers are urged to match all disclosures with Form 26AS, AIS, and TIS. 'Accuracy is critical. Errors can invite scrutiny despite the voluntary nature of this facility,' Bhalla warned. Final word
Mint
21-05-2025
- Business
- Mint
Getting a refund of excess TDS on rent deposited by tenants is harder than it's supposed to be
It's that time of the year when taxpayers start downloading the Annual Information Statement (AIS) and Form 26AS to file their income tax returns (ITR). AIS is a detailed summary of a taxpayer's information provided in Form 26AS, which details the amounts of tax deducted at source (TDS) or tax collected at source (TCS) from various income streams, apart from the advance tax/self-assessment tax paid and high-value transactions. Recently, many landlords were taken by surprise while carrying out this exercise in respect of their rental incomes. They found that the amount of TDS credit on their rental incomes in Form 26AS was substantially lower than what was deducted and deposited by their tenants. Individual tenants paying rent in excess of ₹50,000 per month were required to deduct 5% as TDS and deposit the amount with the exchequer under Section 194IB of the Income Tax Act. This TDS rate was reduced to 2% with effect from 1 October 2024. In many cases, due to lack of awareness about the rate change, tenants deducted and deposited TDS at 5% for FY25 through their annual challan-cum-TDS statement prescribed in form 26QC. Also Read | Details on rent, home loan, TDS: ITR forms seek more disclosures this year Ideally, as per the law, the full TDS credit of the actual tax amount deducted and deposited by tenants (even if higher than the applicable rate) should be reflected in Form 26AS. The excess TDS credit can be claimed by the landlords while filing their ITRs. However, TDS credit of only 2% is reflected in Form 26AS even though the tenants had deducted and deposited TDS of 5%. This appears to be due to a glitch in the TRACES utility, which limits the availability of TDS credit to the extent of 2% only. Refund applications This faulty TDS utility is causing undue hardship to landlords and tenants because getting a refund is not easy. Taking cognisance of the problem, the Income Tax Department's Centralised Processing Centre (CPC) in Bengaluru has been sending mails to deductor tenants, prompting them to claim refunds of the excess TDS deposited by them by applying online in Form 26B. A link containing a note on the step-by-step procedure for filing Form 26B is also provided. To claim the refund of excess TDS amount, tenants should log in to the TRACES website. They need to click on 'Request for Refund' under the 'Statements/Forms' tab and select the reason 'I have made an excess payment of tax by mistake" from the drop-down list. They then need to add the relevant challan 26QC and fill in details including acknowledgement number, financial and assessment years, date and amount of TDS deposit, BSR code, and challan serial number. The claimable refund amount of excess TDS gets auto populated in Form 26B. They then add their bank account details to get the refund. Also Read | TDS on rent and contract work: How small taxpayers can avoid penalties The last segment of Form 26B contains certification to be provided by applicant tenants that the refunded amount shall not be claimed as TDS credit and there is no outstanding TDS demand in their names. Applicants finally need to e-verify Form 26B, either through their digital signatures or by Aadhaar-based OTP verification and submit it online. The guidance note suggests that applicant tenants will automatically get refunds of excess TDS amounts in their bank accounts after e-filing their application in Form 26B. But, in reality, when tenants e-file Form 26B, a message appears, directing them to take a printout of the Form 26B acknowledgement and send it to the jurisdictional TDS officer for further verification. Lengthy checklist When applicants send such application acknowledgements to the officer concerned, they are asked to furnish numerous other records and documents. These include the rental agreement, bank statement for the entire year, evidencing payment of rent and deposit of TDS, challan-cum-statement in Form 26QC, copy of the PAN card, and a cancelled cheque. The applicant tenants are further asked to submit a notarised indemnity bond on stamp paper of ₹100, undertaking to indemnify the Income Tax Department against any probable losses and demands arising out of such refund claims. Even after providing the plethora of records and documents, granting the refund is still at the discretion of the jurisdictional TDS officer. Also Read | Claimed HRA but skipped TDS on rent? The taxman wants answers Article 265 of the Constitution of India mandates that no tax can be collected except with the authority of law. So, the onus of refunding the excess tax amount should have been on the revenue department. Instead, it has been converted into an onerous task for tenants who have to run from pillar to post to get their otherwise Constitutionally guaranteed refunds. Mayank Mohanka is founder of TaxAaram India and a partner at S.M. Mohanka & Associates.
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Business Standard
19-05-2025
- Business
- Business Standard
Got a big gift recently? Here's how it could trigger a tax surprise
Received a generous gift recently, like a flat from a relative or a big cash transfer from a friend? This windfall might land you in trouble with the taxman if you're not careful. Here's what you need to know about how gifts are taxed under Indian income tax laws. What kinds of gifts are taxable? 'Under Section 56(2)(x) of the Income Tax Act, gifts received without consideration—like cash, property, or even virtual digital assets—can become taxable if the total value exceeds Rs 50,000 in a financial year,' says Naveen Wadhwa, vice-president, Taxmann. This includes: · Cash or bank transfers received as gifts. · Immovable property (like land or a house) received for free or at a much lower price. · Movable assets, such as jewellery, shares, art, or crypto, if received free or at a discount. In such cases, Wadhwa adds, the value must be reported as "Income from Other Sources" in your ITR for the relevant year. Are there any exemptions? Yes, and some are quite generous. Wadhwa explains that gifts from 'relatives' are fully exempt from tax. But the law has a specific definition for relatives: it includes your spouse, siblings, parents, children, and their spouses—but not friends or distant cousins. Wadhwa further clarifies: 'Gifts received on your marriage are also completely tax-free—regardless of amount. Inheritance, gifts received under a will, or in contemplation of death are also exempt.' That said, Wadhwa suggests it's a good practice to disclose even exempt gifts in the "Exempt Income" (Schedule EI) section of your ITR to avoid future scrutiny. When does a gift become taxable? Kunal Savani, partner at Cyril Amarchand Mangaldas, explains: 'Once the total value of gifts received without consideration exceeds Rs 50,000, the full amount—not just the excess—becomes taxable under 'Income from Other Sources'.' He cautions that this applies not just to cash gifts, but also to discounted purchases—say, if you bought a house worth Rs 70 lakh from a non-relative for Rs 10 lakh, the Rs 60 lakh difference may be taxed. Savani also reminds taxpayers to check if the donor qualifies as a "relative" per the Income Tax Act before assuming tax-free status. Practical ITR tips for gift receivers 'Keep detailed records of every gift you receive—especially high-value ones,' advises Ritika Nayyar, partner at Singhania & Co. This includes: · Nature and value of the gift · Date of receipt · Donor's name and relationship · Supporting documents like gift deeds or bank transfers 'If you're receiving an immovable property as a gift, the stamp duty value becomes key to determining taxability,' she adds. Even if a gift is exempt, Nayyar recommends voluntary disclosure under Schedule EI of your ITR, just to be on the safe side. Can you get into trouble for not declaring gifts? Yes, and the consequences can be serious. 'With the I-T department using AI-powered analytics and reviewing AIS (Annual Information Statement), it's very easy for them to spot large deposits or unusual transactions,' warns CA Deepesh Chheda, partner at Dhruva Advisors LLP. 'If you forget to declare a taxable gift, or claim an incorrect exemption, it could result in a tax notice, penalties, and interest,' he adds. Keep it transparent All four experts strongly advise erring on the side of caution. If you're salaried or middle-income and received any gifts during the year—be it cash, property, or assets—check if they fall under taxable categories and file your ITR accordingly. 'The key is clarity and documentation—know the rules, assess fair market value correctly, and maintain all gift-related records,' Wadhwa said.
