Why Annual Information Statement (AIS) is important to check before e-filing of return for FY 2021 & onwars?

Income Tax Department on November 1, 2021 rolled out the Annual Information Statement (AIS) on its Income Tax Portal as a part of its “PROJECT INSIGHT”. Income tax Department initiated Project Insight focuses on three goals which are Promotion of voluntary compliance and avoid non compliances; Imparting confidence that all eligible persons pay appropriate tax; and promoting judicious and fair administration of tax.

In this article you will get information on what is AIS of Income Tax, types of transaction displayed in AIS, whether AIS displays correct information always, can information appearing in AIS be corrected and most important which Income Information appearing in AIS should be reflected in ITR.

WHAT IS ANNUAL INFORMATION STATEMENT(AIS)

AIS is a comprehensive view of information of taxpayer which has been submitted under his/her PAN various reporting entities such as stock exchange, banks, mutual funds, companies issuing shares and RBI

WHAT ARE THE TYPES OF TRANSACTION DISPLAYED IN AIS

PART A represents General Information about Taxpayer such as Name, Address, PAN, Date of Birth

PART B represents category of transactions that will be displayed in AIS and it is further segregated into tabs:

Part B1: Information relating to tax deducted or collected at source

• All the information on TDS/TCS as used to appear in 26AS of assess will be reflected here which will include details such as Quarter, date of payment/credit, Amount paid/credited, TDS/TCS Amount, Section of TDS, Section description, deductor Name and TAN number.

Part B2: Information relating to specified financial transaction (SFT)

Part B3: Information relating to payment of taxes

• All the information on payment of taxes as used to appear in 26AS of assess will be reflected here which will include details such as Assessment Year, Major Head, Minor Head, Amount of Tax, surcharge, cess & others, date of deposit and challan identification number (CIN)

Part B4: Information relating to demand and refund

• All the information on demand & refund as used to appear in 26AS of assess will be reflected here which will include details such as Assessment Year, mode, nature of refund/demand, amount and date of payment.

Part B7: Any other information in relation to sub-rule (2) of rule 114-I

• Rule 114-I – The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or any person authorized by him shall, under section 285BB of the Income-tax Act, 1961, upload in the registered account of the assessee an annual information statement in Form No. 26AS containing the information specified in the Rule, which is in his possession within three months from the end of the month in which the information is received by him.
• Information related to TDS/TCS, specified financial transactions, payment of taxes, demand/refund, completed/pending proceedings and information related to Sec 90 (Agreement with foreign countries or specified territories) and Sec 90A (Adoption by Central Government of agreement between specified associations for double taxation relief.)

WHETHER INFORMATION SHOWN IN ANNUAL INFORMATION STATEMENT IS COMPLETE AND ACCURATE

Annual Information Statement of Income Tax does not always show correct and accurate information of the tax payer. While filling Income Tax returns for A.Y. 2022-23, it was found in various cases that-

1. The information appearing in AIS does not pertains to taxpayer.
2. The information was partly incorrect.
3. The information was not complete.
4. The Information was not accurate.
5. The Income was not taxable.
6. The Information is duplicate or included twice in AIS

CAN INFORMATION APPEARING IN ANNUAL INFORMATION STATEMENT CORRECTED

Income tax portal has facilitated taxpayer to submit the feedback on information appearing in AIS.

Taxpayers can

• Log on to Income Tax Portal on website https://www.incometax.gov.in/iec/foportal
• Go to Services tab > Annual Information Statement
• Click on the information on which feedback is to be submitted.
• A “Optional” feature under heading feedback appears in front of the information.
• Taxpayer can click on optional feature and submit the feedback after selecting relevant option from the drop-down box.

WHICH INCOMR INFORMATION APPEARING IN AIS SHOULD BE REFLECTED IN ITR

The income Tax department might send notices to assessee incase where a particular income information appearing in AIS is not reflected in Income Tax Return (ITR) filed by the Assessee.

CRITICAL POINTS TO BE KEPT IN MIND BEFORE FILING ITR TO AVOID INCOME TAX NOTICES

1. Dividend & Interest income should be reflected in ITR as income from other sources.
2. Transactions of Sale & Purchase of Securities, mutual funds & units of UTI will not be directly reflected in ITR but corresponding Capital gain and losses will be reflected by calculating long term or short-term gain/loss as the case may be in accordance with Income Tax Act,1962.
3. Interest on Income Tax refund should be reflected in ITR as income from other sources.
4. All the Income on which TDS has been deducted should be appropriately reflected in relevant head of ITR.

Conclusion

All the information on AIS has been in detailed mentioned in this article and key points to keep in mind while filling ITR. However, how a department will issue notices to assessee on basis of AIS will come to light in near future.

Need Expert Assistance for Business tax filing and checking of Annual Information Statement

For expert assistance on checking of Annual Information Statement or return filling in Udaipur and Rajasthan, reach our professionals at Tax Ledger Advisor.

Also refer other articles from taxledgeradvisor >> https://www.taxledgeradvisor.com/business-tax-filling/ https://www.taxledgeradvisor.com/salaried-tax-filing/