Jigar M. Patel
International Tax Attorney
It’s the Income Tax Return (ITR) filing season. Taxpayers would be well advised to review the information in regard to their tax payments, investments and financial transactions as reflected in some key documents before filing their ITRs. In this context, it has been quite aptly remarked that, “every taxpayer must know, what the Taxman knows about him.”
Form 26AS – Statement of Taxes
Form 26AS is a consolidated statement for a relevant financial year, that provides details of all taxes standing to the credit of a taxpayer under his Permanent Account Number (PAN) by way of amounts deducted as TDS or collected as TCS or taxes paid by way of advance tax or on self-assessment. Entries of TDS and TCS reflect corresponding values of payments received by way of interest, dividend, contract or professional receipts, sale consideration for property etc.
Form 26AS can be viewed and downloaded conveniently from the TRACES website. For taxpayers, who do not maintain regular books of accounts, 26AS serves as a valuable source of information. It needs to be borne in mind that any income reflected in this Form if missed to be reported in ITR can easily trigger an inquiry or scrutiny or invite adjustments in the processing of ITR by the Income-tax Department’s Computerized Processing Centre (CPC).
What is an Annual Information Statement?
Annual Information Statement (AIS) is a more detailed and comprehensive view of information for a taxpayer as compared to that displayed in Form 26AS. This is compiled on the basis of Annual Information Returns (AIRs) filed by various agencies in regard to specified financial transactions (SFT) of a taxpayer.
A taxpayer can provide feedback to the Income-tax Department on information displayed in AIS. AIS shows both reported value and modified value (i.e. value after considering taxpayer feedback) of financial transactions under various sections.
The objectives of AIS are to display complete financial information (as available with the Income-tax Department) to the taxpayer, with a facility to capture online feedback, promote voluntary compliance and enable seamless prefilling of ITR.
Key difference between Form 26AS and AIS
Compared to Form 26AS, AIS provides a much more detailed and comprehensive view of a taxpayer’s financial transactions. AIS reports transactions, even where no TDS / TCS has been deducted, unlike what gets reflected in Form 26AS. This includes savings account interest, dividend, rent received, purchase and sale transactions of securities or immovable properties, foreign remittances, interest on deposits, GST turnover etc.
Taxpayer Information Summary
The Taxpayer Information Summary (TIS) is a category-wise summary of the taxpayer’s financial and tax data derived from the AIS. The information accepted by the taxpayer in TIS is used for pre-filling the return, where applicable.
Practical Tips for Taxpayers
Every taxpayer would be well advised to thoroughly check his Form 26AS and AIS before filing his ITR and duly ascertain that no vital information in regard to his income, financial transactions and tax payments is missed to be reported.
There can be errors in the reporting in AIS. If the information is not fully correct or is incorrect in an AIS, the taxpayer can submit his feedback on the portal and flag such incorrect entries. Such an option is not available to the taxpayer with respect to the information reflected in Form 26AS.
If there is a variation between the details of tax paid as displayed in Form 26AS on TRACES Portal and the information relating to tax payment as displayed in AIS on Compliance Portal, the Department’s advice is to rely on the information under 26AS for the purpose of filing of tax return and for other tax compliance purposes.
