Form 26AS: An Income Tax Filing Document

Meaning of Form 26AS: The Form 26AS (ANNUAL TAX STATEMENT) is a consolidated tax credit statement issued by the Income Tax Department to the tax payer. Entries in the Tax Credit Statement (Form 26AS) are generated when a valid PAN number has been reported in quarterly TDS statements. It shows how much of your tax … Continue reading “Form 26AS: An Income Tax Filing Document”

Meaning of Form 26AS:

The Form 26AS (ANNUAL TAX STATEMENT) is a consolidated tax credit statement issued by the Income Tax Department to the tax payer. Entries in the Tax Credit Statement (Form 26AS) are generated when a valid PAN number has been reported in quarterly TDS statements. It shows how much of your tax has been received by the IT Department and is consolidated from multiple sources like your salary / rent /professional / interest income etc. This form contains the annual tax statement under Section 203AA and second provision to Section 206C (5) of the Income Tax Act, 1961 and Rule 31AB of Income Tax Rules, 1962. TDS certificates i.e. form 16 and 16A must be cross checked with form 26AS.

Form 16 is issued by an employer whereas Form 16A is issued by any other TDS deductors not being an employer viz. a bank deducting TDS on Interest, a client deducting TDS on Professional fees, a tenant deducting TDS on Rent.

Importance:

Form 26AS is important for claiming the credit of TDS/TCS deducted/collected by the deductor/collector which has been deposited to the account of the government. The deductor/collector should accurately file the TDS/TCS statement giving details of the tax deducted/collected on your behalf.

The form is basically divided into several parts as follows:

PART A – Details of Tax Deducted at Source

It consists of detailed list of tax deductors and total amount deducted/paid or credited to you with tax deducted and tax deposited thereon. TDS reflected in Form 16 and Form 16A should be matched with this part.

PART A1 – Details of Tax Deducted at Source for 15G / 15H

This part will show transaction in those financial institutions such as banks where the individual has submitted Form 15G / 15H. TDS in these cases would be zero. It enables you to keep a track of all the interest gain which has not been taxed.

PART A2 – Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA (For Seller of Property)

Here u/s 194IA a buyer of Immovable property has to deduct TDS and remit the TDS to government through challan Form 26QB provided the consideration for transfer of an immovable property is not less than Rs. 50 lakhs. Amount will reflect under this part if you are a seller of the property.

PART B – Details of Tax Collected at Source (TCS)

Every person, being a seller,shall collect tax at source(TCS) from the buyer of goods specified in section 206C(1). TCS is collected on sale of Liquor, timber, scrap etc. at the time of debiting of the amount payable to buyer or at the time of receipt of payment, whichever is earlier.

PART C – Details of Tax Paid (other than TDS or TCS)

All advance tax payments, self-assessment tax payments are reflected under this part.

PART D – Details of Paid Refund

If you have got any tax refunds in that assessment Year it would be listed under this part.

PART E – Details of AIR Transaction

If you make some high value transactions, such as investment in property and mutual funds, then these transactions are automatically reported to the income tax department by banks and other authorities through Annual Information Return (AIR)

PART F – Details of Tax Deducted at Source on Sale of Immovable Property u/s 194IA (For Buyer of Property)

As mentioned above in Part A2. Amounts will reflect in this column if you are a buyer of the property.

Example: Mr. X a salaried individual working in A Ltd and drawing a salary of Rs.40,000 per month which is Rs.4,80,000/- per annum during the financial year 2013-14 I.e Assessment Year 2014-15. He has made declarations to A Ltd for deductions for LIC premium of Rs.10,000, Provident Fund Rs.25,000, Mediclaim Rs.3,000. Housing Loan Interest Rs.30,000 and principal repayment of Rs. 12,000/-. Therefore his taxable Salary is Rs.4,00,000/- after all the above deductions. Basic Exemption limit for individual is Rs.2,50,000/- on which no TDS is applicable. On the balance amount of Rs.1,50,000, tax is levied @ 10% which amounts to 15,000. A Ltd will therefore deduct an amount of Rs. 1,250 per month from Mr. X salary from the beginning of first month of the financial year. Any shortfall in TDS is usually deducted in last month of the financial year. A Ltd will file quarterly TDS returns by depositing the TDS with government on prescribed due dates. A ltd will issue Form 16 to Mr X which is a certificate of salary drawn and TDS deducted therefrom by 31st May. Mr. X should firstly calculate the TDS deducted from his monthly salary slips with TDS reflected in Form 16 if it matches with the amount he should further check whether the same amount matches with TDS reflected in Form 26AS.

Any person should duly check his Form 26AS before filing his income tax returns as ignorance of the same can simply lead to tax credit mismatches resulting to notices from the IT Departments, IT Refund withheld or even penalties. One must remember the saying ‘Precaution is always better than cure’ and also ‘stich in time saves nine’ both equally relevant for the above discussed subject.

Joel Richard writes for H&R Block India which strives to blend tax expertise with a strong focus on continually improving the client experience to provide all its clients with an unparalleled value proposition for filing their Income Tax Return Online.

Failing Is Not an Option

If you ask me what will it take to pass the RTRP exam I’ll say simply that it depends on three factors: your commitment to the preparation process, how you set out to prepare yourself for the exam, and last, but not least, how you approach the challenge of exam day at the Prometric test center.

As one candidate put it after passing the exam, “… it’s a joke”. Well yes! It’s a joke if you are familiar with tax related subjects covered in the test and that familiarity can come from varied sources, not the least of which is experience in preparing tax returns, providing you have kept up with the frequent changes in tax laws and IRS rules.

If your experience in preparing tax returns is not that great, you can still acquire the knowledge needed to pass the exam by setting up a study program that you will use consistently to become familiar with the content of the IRS test specification outline. In the latter case, your commitment to a systematic study plan will be paramount. To be more succinct about that, you need set up a study plan that you can follow and not stop studying until you have run the course of preparation you need, to become proficient on tax subjects.

The material you choose to prepare yourself for the exam is very important. If you are a bookworm who does not mind sitting for hours on end going through volumes of study material contained in a five-pound book, more power to you. But do that consistently to soak-up enough knowledge; it will probably work for you.

If, on the other hand, your time is limited and other responsibilities prevent you from spending endless hours combing through study materials, then it might be more to your advantage to find study material that has already filtered out the superfluous and provides you with the core of the information you need to review in order to feel confident about your chances of passing the exam.

Regardless of your choice of study material, one big secret about passing the RTRP exam is to include practice sessions in your preparation process. Practice using a test bank that simulates the environment you will confront at the Prometric test center. It is all about computers and therefore, the more comfortable you are in such an environment the better your chances of success. So, practice as much as possible during your preparation process using a test bank that allows you to even time yourself in practice tests, to simulate conditions at the official test room.

Having put in all that effort to prepare yourself for the exam, how are you going to respond to the pressure of exam day, in a seemingly hostile environment where rules of conduct are strictly enforced? How are you going to handle the pressure of time, knowing that you have a limited number of minutes to answer enough questions to get a passing score in the exam? How are you going to handle unforeseen circumstances such as a question or two in the exam on which you draw a complete blank? Last, but not least, what happens if you decide to panic?

None of these situations will arise if you devise a strategy to handle them, before you go to the exam. Have you considered visiting the Prometric test center before your exam day? If not, do so and the fear of the hostile environment will dissipate. Have you considered going through the exam from top to bottom and answer all the questions you are sure of and accumulate at least those points for your final score? Consider that doing that would take you about half the time allotted for the exam (75 minutes), and you would have another 75 minutes to go to the top of the exam and take a closer look at the remaining questions. What about the question or two you know nothing about? Do they matter? The answer is, probably not. Take your best guess at them and move on. You do not need a perfect score to pass the exam.

Those are just a few suggestions. I am sure you can think of a few more things you can do to calm yourself and that will help make your exam experience a memorable one because you passed the exam on your first attempt.

Be confident on your exam day and.we’ll see you on the other side, with a happy grin on your face!

Norma Wahnon

[http://www.1040examprep.com]

To pass any exam or test, preparation is the key. The RTRP exam is no exception. Using suitable study materials will make preparation for the exam less of a chore. We offer study guides organized according to the IRS Test Specification in simple, easy to read language and fully illustrated with graphics and sample forms and a practice test bank that simulates the tests administered by Prometric and also assess students performance to help them determine areas where more study is required in order to adequately prepare for exam day. Click the link above to learn more about our products.