Annual Information Summary (AIS)

With the launch of new Annual Information Summary (AIS), there will not be much scope for taxpayers to hide their income in their income-tax returns.

The income tax department launched Annual Information Summary (AIS) this week on its portal that not only contains a comprehensive outlay of the taxpayer information but also allows the taxpayer to submit feedback on the provided information

What is AIS?

Annual Information Statement (AIS) is a tool that tells taxpayers what the tax department knows about them. The AIS is a comprehensive statement containing details of all the financial transactions undertaken by you in a financial year (FY).

What transactions does AIS contain?

The AIS contains information related income earned from various sources such as salary, dividend, interest from savings account, recurring deposits, sale and purchase of equity shares, bonds, mutual funds etc. The statement also contains information related to TDS, TCS and any income tax demand or refund.

AIS vs Form 26AS

The existing Form 26AS primarily provides information on Tax Deduction at Source (TDS) and Tax Collected at Source (TCS) that has been deposited, and financial transactions exceeding certain prescribed threshold limits.

The new AIS will contain much more information relating to interest, dividend, securities transactions, mutual fund transactions, foreign remittance, etc. Even if a taxpayer receives Rs 500 from a mutual fund, that will be reflected in the new AIS.

This AIS will also contain a taxpayer information summary (TIS), which will show the aggregated value of his financial transactions. The taxpayer can use these aggregated values to file his income-tax return (ITR).

Purpose of AIS

On the face of it, the new AIS is expected to make the taxpayer’s task of filing ITR easier and faster. The tax payer can import the information contained in the AIS directly to his ITR form through the pre-filling facility.

As a bi product of this transparency in the system, tax filers will find it difficult to hide any income from the income tax authorities.

Is AIS already operational?

As of now, AIS works in tandem with Form 26AS. AIS is still not fully operational and the system gives the tax filers an option to provide feedback in case of any discrepancy or error in the AIS. This means that, unlike Form 26AS, information shown in the AIS can be modified.

Once the AIS becomes operational (probably next financial year), a taxpayer could get a notice if the information filed in his ITR doesn’t match the information contained in the AIS.

Form 26AS will continue to exist until the new AIS is validated and is completely operational.

How to download the new AIS

- Log into the e-filing portal using your PAN or Aadhaar and your password

- Go to the ‘Services’ section in the top menu, click on ‘Annual Information Statement (AIS)’ and then on ‘Proceed’

- Click on the Download button in the AIS tab

- Select PDF option and click on ‘Download’

Summary

AIS may gradually replace Form 26AS. For this assessment year, however, you should tally information provided in both Form 26AS and AIS. If there is any variation between information in AIS as shown on the IT website and Form 26AS on TRACES portal, the feedback should be provided online. Since taxpayers can check the information beforehand and get incorrect information modified before submitting their ITR, AIS reduces the hassle of dealing with enquiries from the IT department for the smallest of errors.

AIS is the future. It needs to be embraced.

Regards

Manoj Arora
Official Website