The Income Tax Department has introduced a new statement for taxpayers known as the Annual Information Statement (AIS). According to chartered accountants, the new AIS will disclose details of the taxpayer’s most digital financial transactions done within a financial year (FY). The AIS contains more information than the Form 26AS which is available to a taxpayer, commonly known as a tax passbook.
What is new statement AIS?
The AIS is a detailed statement that lists all of your financial transactions that were reported to the IT department by various entities (mainly financial institutions) throughout the financial year.
This comprises income from a variety of sources, such as salary, interest, and the sale or purchase of securities, such as stock, mutual funds, and bonds. The AIS will show any sale or purchase of shares or mutual fund units, as well as any dividends or interest received.
What are the parts of AIS?
Part A and Part B are the two portions of AIS. Part A provides general information such as the taxpayer’s PAN, masked Aadhaar number, name, date of birth, and so on. TDS, TCS, Specified financial transactions, tax payment, tax demand and refund, and other information are all included in Part B.
A taxpayer will be able to download AIS information in PDF, JSON, and CSV formats.
What is TIS?
In addition to AIS, the income tax dept also introduced the Taxpayer Information Summary (TIS). This is a concise summary of the information from the AIS.
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).
As a result, if you find an error in your TIS or AIS, you must rectify it in the AIS, which will be corrected in real-time in the TIS as well. It is important to review the AIS and provide feedback. If there is an error and you have not provided feedback seeking rectification, the income tax department may assume that the information reflected in the AIS is correct, and you may be asked to explain the discrepancy between your income tax return and the information in the AIS.
A facility has been provided for the taxpayer to submit online feedback if they feel the information is erroneous, relates to another person/year, or is duplicate. It is also possible to provide feedback by submitting information in bulk.
Difference between AIS and Form 26AS
The TDS and TCS deposited against the taxpayer’s PAN during the financial year are reported in Form 26AS, which is similar to a tax passbook. Furthermore, information linked to specific transactions such as mutual fund unit purchases, overseas transfers, and so on will be reflected only if the transaction exceeds the specified limit or if tax has been deducted in the amended version of Form 26AS.
The AIS is a more comprehensive. In the case of AIS, transactions will be reflected regardless of whether or not tax has been deducted. As a result, even if interest on a fixed deposit has not been taxed, it will still appear in the AIS. TDS, TCS, sale, purchase of stock shares, mutual funds, dividend, interest income, and other items will be reflected on the statement. The number of transactions that can be included in the AIS is not limited. Essentially, AIS records all of your specific financial transactions, whether little and large, that have been reported to the income tax department by various financial companies.
Importance of AIS for Taxpayers
All financial activities are displayed in AIS, including salary income, dividend income, interest income from savings and fixed deposits, sale and purchase of stocks, and so on. It would be easy for a taxpayer to report the correct information in their income tax return with the support of all of this financial information. The taxpayer can avoid a discrepancy between the data reported on the income tax return and the real financial transaction.
If you earned Rs 50 as a dividend from stock shares, the AIS will reflect this financial transaction as well. Similarly, the AIS will reflect all TDS and TCS deposited against your PAN during the financial year.
With the help of AIS, you may double-check all of your financial transactions before reporting them to the income tax authorities. This will make it easier for you to double-check and report all of the required information on your tax return. Dividends received in FY 2020-21, for example, are taxable in your hands. As a result, even if the sum is as low as Rs 50, you must disclose it in your ITR and pay tax on it. If you forget to report this Rs 50, the AIS will help you recall.
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