What information does Income Tax Department have about you? | Individual Transaction Statements Vis a Vis Form 26AS
Income Tax is one of the most prevalent and the long standing tax in India accumulating more than 50% of revenue from taxes for the Central Government. Income tax is contributed by corporates as well as individuals. Surprisingly, a mere 2-3% of the individual population in India actually pays income tax. However, over the recent years, these numbers have been increasing rapidly. One of the main reasons is the possession of information with the Income Tax Department gathered through various sources in respect of tax payers. This information acts as a deterrent to avoidance and evasion of tax leading to true disclosures, full compliances and complete payment of taxes.
On account of this information, Income Tax Department has evolved from a revenue department to a repository, making itself a powerful tool for governance in the hands of administration. Advancement in information technology combined with timely amendments in law has enabled to bring in place, a robust and a proactive system for compiling and analysing this information by the Income Tax Department. This information is compiled in an internal departmental report called as the Individual Transaction Statement, prepared for each taxpayer separately and the same is accessible to Income Tax Officer having jurisdiction over that tax payer.
Certain extracts or entries of the Individual Transaction Statement are made available to the tax payers in a separate statement. This is done with the purpose to encourage the voluntary disclosures of transactions by taxpayers and also to avoid litigations post filing of income tax returns. This statement is called the Form 26AS – Annual Information Statement In other words, Form 26AS is a subset of Individual Transaction Statement (‘ITS’). On May 28th 2020, the Income Tax Department modified the Form 26AS completely to include more entries and larger extracts of the Individual Transaction Statement.
Let’s have a look at the information compiled in both the statements.