Annual Information Statement (AIS) before filing your Income Tax Return (ITR) isn’t just a suggestion anymore – it’s a crucial step for a smooth tax season. The Income Tax Department is cracking down, and even small mismatches between your declared income and their records can lead to big headaches.
Why the AIS is Your Best Friend Before Filing
The AIS is like a detailed financial report card from the tax department. It goes beyond the basic TDS information you find in Form 26AS, offering a much broader picture of your financial year. This includes:
- Salary and Bank Interest: All income from your job and interest earned on your savings and fixed deposits.
- Investments: Dividends received, details of your stock trades, and mutual fund transactions.
- Property & Other Income: Rent collected, and information about high-value transactions like credit card spending or large cash deposits.
- Tax Payments & Refunds: A summary of any advance tax or self-assessment tax you’ve paid, as well as past demands or refunds.
- And More: Essentially, any significant financial activity reported to the tax authorities.
The High Stakes of Mismatches
The Income Tax Department is serious about data matching. In the 2024-25 fiscal year alone, over 68,000 cases were flagged where taxpayers’ ITRs didn’t align with their AIS data. This shows how closely your filings are now scrutinized.
Even minor errors can trigger a ripple effect:
- Notices: You could receive a tax notice, demanding clarification or additional information.
- Refund Delays: Mismatches can hold up your tax refunds, leaving you waiting for your money.
- Hefty Penalties: The stakes are high. Penalties for inaccurate filing can reach up to ₹5 lakh per case. For continued non-compliance, daily fines can range from ₹10,000 to ₹15,000.
As tax experts like CA Shefali Mundra of ClearTax emphasize, “If you don’t verify it, mismatches can trigger tax notices, delay refunds, or bring penalties up to ₹5 lakh for underreporting.” CA Sakchi Jain, a financial educator, adds that “even small mismatches can lead to notices or refunds getting stuck” this year, given the department’s stricter approach.
What to Do If You Find an Error
It’s natural for errors to occur, but the good news is you can easily rectify them. If you spot any discrepancies in your AIS, you can submit feedback online through the income-tax e-filing portal.
Here’s a quick guide:
- Log In: Visit the e-filing portal and access your AIS.
- Review Details: Go through the details under Part B, specifically checking tabs like TDS/TCS Information, SFT Information, Payment of Taxes, Demand and Refund, and Other Information.
- Find the Discrepancy: Expand the relevant sections to view transaction-level data.
- Submit Feedback: Click the ‘Optional’ tab in the feedback column next to the incorrect transaction.
- Confirm: A success message will appear once your feedback is submitted, and your Taxpayer Information Summary (TIS) will update. You can also download an acknowledgment for your records. The feedback may even be shared with the original source of the information for correction.
Don’t Risk It – Double Check!
Before you hit “submit” on your ITR, take the time to compare it with your AIS. Correct any errors, report missing income, and double-check every detail. This small step can save you from potential scrutiny, delayed refunds, or significant financial penalties. Your accurate filing ensures peace of mind.