InvestorQ : Do you think that the new form 26AS will make tax-filing and compliances a burden on taxpayers?
Swati Naik made post

Do you think that the new form 26AS will make tax-filing and compliances a burden on taxpayers?

Answer
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Ria Roy answered.
1 month ago


PM Modi has recently announced the modification of old Form 26AS to include several expenses beyond the specified limit. If you make certain expenses that are beyond the specified limit, it shall be reflected in your Form 26AS and you will be required to file your income tax return. In case of failure to file the return, the tax shall be deducted at a higher rate.

Now, the purpose of this move is to bring more people under the tax spectrum, to check whether one’s spending is in line with the income disclosed to the department, to reduce cash transactions, and to help in curbing tax evasion. This definitely means that the tax payer’s burden shall go up and that is mostly because of the lower threshold of specified expenses.

If we talk about compliances, there will be an increased burden on the taxpayers because they have to be more cautious about where they spend their money, they will have to preserve more bills than ever and some will have to file a return even when they do not have enough taxable income.

For example, the insurance expenses for a senior citizen are comparatively higher and the limit prescribed under SFT (Statement of financial transactions) for such transaction is Rs 20,000. It is possible that a senior citizen has taken an insurance policy for Rs 30,000 a year but does not have enough taxable income. In that case, he would be liable to file an income tax return, which would be unnecessary compliance for him.