Annual Information Statement (AIS)

The Annual Information Statement (AIS) is a significant development in tax compliance and transparency in India. Introduced by the Income Tax Department, AIS is a comprehensive summary of a taxpayer’s financial transactions for a particular financial year. This blog explores the key aspects of AIS, including its purpose, uses, features, types of information it contains, how to download, how to rectify errors, AIS vs 26AS vs TIS.

What is AIS?

The Annual Information Statement (AIS) is a detailed record that provides taxpayers with insights into their financial activities as captured by the Income Tax Department. AIS reflects information such as income received, tax deducted at source (TDS), tax collected at source (TCS), and various financial transactions reported by third parties like banks, mutual funds, and registrars.

Uses of AIS

Enhanced Transparency:
AIS ensures taxpayers have full visibility into the financial data reported to the Income Tax Department, reducing discrepancies and errors in ITR filings.

Accurate Tax Filings:
By reviewing AIS, taxpayers can validate their income and other financial details, ensuring all relevant information is included in their ITR.

Tax Planning:
AIS helps taxpayers identify potential discrepancies or gaps in their tax planning, enabling better financial management and compliance.

Facilitates Reconciliation:
AIS allows reconciliation of income details between Form 26AS, TDS certificates, and other sources, reducing the likelihood of notices from the tax department.

Key Features of AIS

Comprehensive Coverage:
AIS consolidates a wide range of financial information, including investments, expenses, and income, in one place.

User-Friendly Format:
The AIS is presented in an easy-to-understand format with clear categorization of data.

Editable Functionality:
If a taxpayer notices discrepancies in the information, AIS allows feedback to correct or update the data.

Integration with Tax Filing:
The AIS is aligned with ITR filing processes, making it easier for taxpayers to report their income and claim deductions.

Real-Time Updates:
AIS gets updated regularly as financial institutions and third parties report transactions to the Income Tax Department.

Information Included in AIS

The AIS captures a wide array of financial transactions reported to the tax authorities. Some of the key components include:

1. Income Details:

   • Salary income
   • Rental income
   • Interest income from savings accounts, fixed deposits, or recurring deposits
   • Dividend income

2. Tax Payments:

   • Advance tax payments
   • Self-assessment tax payments

3. TDS and TCS Details:

   • Tax deducted at source (TDS) on salaries, interest, or other incomes
   • Tax collected at source (TCS) on specific transactions

4. Financial Transactions:

   • Sale or purchase of immovable property
   • High-value cash deposits or withdrawals
   • Credit card payments above specified limits

5. Investment Information:

   • Mutual fund transactions
   • Stock market transactions
   • Purchase of bonds or debentures

6. Other Transactions:

   • Foreign remittances
   • Donations eligible for deductions under Section 80G

How to Download AIS from the Income Tax Portal

To access and download your Annual Information Statement (AIS), follow these steps:

1. Log in to the Income Tax Portal:

   • Visit the Income Tax e-filing portal.
   • Log in using your PAN and password.

2. Navigate to the AIS Section:

   • Go to the “AIS” tab on the dashboard.

3. View and Download AIS:

   • You will see an option to view your AIS.
   • Select the financial year for which you want to view the statement.
   • Click on the download icon to save the AIS in PDF or JSON format.

How to Open AIS PDF?

The AIS PDF file is password-protected. The password is a combination of your PAN in lowercase and your date of birth in DDMMYYYY format. For example, if your PAN is ABCDE1234F and your date of birth is 01/01/1990, the password would be abcde1234f01011990.

Difference Between AIS and Form 26AS

Difference Between AIS and TIS

By understanding the distinctions between AIS, Form 26AS, and TIS, taxpayers can efficiently use these tools to ensure accurate compliance and seamless tax filing.

Which Form Should a Taxpayer Refer to at the Time of Filing of ITR?

When filing an Income Tax Return (ITR), a taxpayer should primarily refer to the Taxpayer Information Summary (TIS) and Form 26AS. Here’s why:

Taxpayer Information Summary (TIS): TIS provides a summarized version of the Annual Information Statement (AIS), making it easier to understand and directly use in the ITR. It includes pre-aggregated values categorized by income type, such as salary, interest, and capital gains.

Form 26AS: This form focuses on tax-related details such as Tax Deducted at Source (TDS), Tax Collected at Source (TCS), and tax refunds. It helps verify that taxes deducted and paid on your behalf have been correctly credited to your account.

Recommendation:

• TIS: For an easy reference to pre-filled details in the ITR.
• AIS: For reconciling broader financial data if discrepancies arise.
• Form 26AS: For verifying taxes paid and ensuring TDS/TCS credits are accurate.

What to Do If There is an Error in AIS?

Errors in AIS can arise due to incorrect reporting by third parties such as banks or mutual funds. To resolve such discrepancies, follow these steps:

1. Review the AIS:

   • Download and review your AIS to identify specific errors in reported transactions.

2. Submit Feedback:

   • Use the feedback feature in the AIS portal to report discrepancies.
   • Feedback options include marking the information as “Incorrect,” “Not Pertaining to Me,” or “Duplicate.”

3. Contact the Reporting Entity:

   • If the error originates from a third party, such as incorrect TDS details by an employer, contact them to correct the data.

4. Monitor Updates:

   • Once feedback is submitted, monitor the AIS portal for updates or resolutions.

How to Submit Feedback in AIS?

The AIS portal allows taxpayers to provide feedback on discrepancies or errors. Here’s how to do it:

1. Log in to the Income Tax Portal:
   Access the portal

2. Navigate to AIS Section:
   Go to the AIS tab in dashboard

3. Review and Select Transactions:

   • View the AIS for the relevant financial year.
   • Identify the transactions that require feedback.

4. Submit Feedback:

   • Select the specific transaction.
   • Click on the “Submit Feedback” option.
   • Choose the appropriate feedback category:
     • Information is correct.
     • Information is not fully correct.
     • Information relates to other PAN/person.
     • Duplicate information/included in other information.

5. Provide Details:
   Enter additional information if required and submit the feedback.

How to Rectify Errors in AIS?

After submitting feedback, the rectification process depends on the nature of the error:

1. Correction by Third Parties:

   • Errors reported in AIS due to incorrect data provided by financial institutions, employers, or others must be corrected by those entities.
   • Contact the reporting entity and request them to update the correct information with the Income Tax Department.

2. Income Tax Department Action:

   • Upon receiving feedback, the Income Tax Department may review and make necessary updates in the AIS.

3. Revised ITR Filing (if needed):

   • If discrepancies impact your ITR, you may need to file a Revised ITR after the corrections are reflected in AIS.

Summary of AIS

The Annual Information Statement (AIS) is a detailed record of a taxpayer’s financial transactions reported to the Income Tax Department. It serves as a comprehensive document to enhance transparency and facilitate accurate tax filing. Taxpayers can refer to AIS to verify income, taxes paid, and high-value transactions. In case of errors, the AIS portal allows users to submit feedback for corrections. While filing an Income Tax Return (ITR), taxpayers should cross-check details with AIS, TIS, and Form 26AS to ensure accuracy.

FAQs About AIS

1. What is the purpose of AIS?
   AIS provides a consolidated view of a taxpayer’s financial transactions to ensure accurate tax filing and better transparency.

2. Is AIS mandatory for tax filing?
   No, AIS is not mandatory but serves as a helpful tool for verifying financial data before filing ITR.

3. How is AIS different from Form 26AS?
   AIS includes a broader range of financial transactions, while Form 26AS focuses only on tax-related details like TDS, TCS, and refunds.

4. What should I do if there’s an error in my AIS?
   Submit feedback on the AIS portal and contact the reporting entity for corrections if necessary.

5. What is the password for opening the AIS PDF?
   The password is your PAN in lowercase followed by your date of birth in DDMMYYYY format (e.g., abcde1234f01011990).

6. How often is AIS updated?
   AIS is updated as financial institutions and third parties report transactions to the Income Tax Department.

7. Can AIS data be used directly in ITR?
   AIS data can be cross-verified, but the Taxpayer Information Summary (TIS), a summarized version of AIS, is better suited for pre-filling ITR details.