• Notification Date: 13-11-2021
• Notification No: 29/2021-22

AIS displays all your digital financial transactions that the I-T dept knows

The Income Tax Department, on November 2, 2021, launched a new statement for taxpayers knwn as the Annual Information Statement (AIS). As per chartered accountants, the new AIS will provide taxpayers with information of most digital financial transactions carried out by them during a financial year (FY).

The AIS contains more information than what is contained in a taxpayer's Form 26AS, which is also called a tax passbook.

What is AIS?

The AIS is a comprehensive statement that contains details of financial transactions done by an individual and reported by various entities (mostly financial institutions) to the tax department during an FY. This includes receipt/income from different sources such as salary, interest etc. or sale or purchase of securities or assets. For instance, any sale or purchase of shares or mutual fund or dividend or interest received will be available in the AIS.

AIS is segregated into two parts: Part A and Part B. Part A covers general information such as PAN, Aadhaar number, name of taxpayer, date of birth etc. Part B includes comprehensive information of TDS, TCS, Specified financial transactions, payment of taxes, tax demand and refund and other information.

A taxpayer will be able to download AIS in PDF, JSON, CSV formats, the tax department mentioned in a press release.

Along with the AIS, the income tax department also launched the Taxpayer Information Summary (TIS). This is a simplified method of viewing the information from the AIS. As per the income tax department press release, "TIS shows the processed value (i.e. the value generated after deduplication of information based on pre-defined rules) and derived value (i.e. the value derived after considering the taxpayer feedback and processed value). If the taxpayer submits feedback on AIS, the derived information in TIS will be automatically updated in real-time. The derived information in TIS will be used for pre-filling of Return (pre-filling will be enabled in a phased manner)."

Thus, if you find any error in your TIS or AIS, then you need to correct it in the AIS, which will be simultaneously amended in TIS as well in real-time. It is important to verify the AIS and give your feedback. In case there is an error and you have not given feedback requesting correction, then it may be assumed that the information reflecting in AIS is correct and true and the income tax department may ask you to explain the mismatch between the income tax return filed by you and the information in the AIS, so make sure you check the AIS properly.

"If the taxpayer feels that the information is incorrect, relates to other person/year, duplicate etc., a facility has been provided to submit online feedback. Feedback can also be furnished by submitting information in bulk," the press release stated.

How AIS is different from Form 26AS

Form 26AS is similar to a tax passbook which comprises details of TDS and TCS deposited against the taxpayer's PAN during the financial year. Further, in the updared6 version of Form 26AS, the information related to specified transactions such as mutual fund unit purchases, foreign remittances etc. will be reflected only if the transaction exceeds the specified threshold or where tax has been deducted. For instance, if the tax has been deducted on the interest received on a fixed deposit, then it will be reflected in Form 26AS.

On the other hand, AIS is more comprehensive in terms of detailed information. In case of AIS, the transactions will be displayed irrespective of whether tax has been deducted or not. So, even if the tax has not been deducted on the interest received on a fixed deposit, it will still be reflected in the AIS. The statement will show TDS, TCS, sale, purchase of equity shares, mutual funds, dividend, interest income etc. There is no specified threshold for transactions to be featured in the AIS.

How it will help taxpayers?

The introduction of details along with more information distinguishes AIS. The new updates made in AIS can be said to be the version 2.0 of Form 26AS. It will make the the return filing process convenient as it provides all the relevant and necessary details.

Also, if the taxpayer is not satisfied or finds mistakes in the generated consolidated statement, he/she can submit a feedback on AIS reporting the same and the derived information in TIS will be automatically get updated in real-time. That information will be utilized for pre-filing of (tax) returns,” says Ruchika Bhagat, managing director of chartered accountancy firm Neeraj Bhagat & Co.

So, most of the information that a taxpayer requires in terms of taxable incomes and taxes paid, to file the tax return will be available in AIS. Moreover, the taxpayer can check and verify the information and get it rectified if mistakes are found, which will significantly reduce the disputes on tax returns making the whole process easier.