ITR Filing: The Importance of Form 26AS And AIS In Income Tax Return Filing

Filing your Income Tax Return: The first step in the process of filing an income tax return is to submit all the required documents. Apart from Form 16, documents related to your income and investments, these documents also include Form 26AS and Annual Information Statement (AIS). You can get Form 26AS from the TRACES portal. Whereas AIS, launched in November 2021, is an expanded version of Form 16A containing a TDS certificate, which can be obtained by logging into the Income Tax Department website www.incometax.gov.in.

Before the introduction of AIS, Form 26AS was the most important document while filing ITR. But now it has become equally important to pay attention to AIS. If the information given in the return does not match the information given in these two documents, then you may have to face problems. For example, your return may be rejected due to information not matching, after which you may have to file a correction. Therefore, it would be better that you use the information given in these two documents correctly while filing the return.

What is the difference between Form 26AS and AIS?

Before the launch of AIS, income tax filers had to check only Form 26AS. It was necessary to do this because Form 26AS was used to confirm whether the details of all taxes paid during the relevant financial year were in the records of the Income Tax Department or not. In this sense, Form 26AS is considered a tax passbook. It contains details of all the taxes that are deposited with the government under the PAN of a taxpayer. In November 2021, the Income Tax Department launched AIS, whose scope extends beyond Form 26AS. Apart from the details of tax paid, it also includes details of income received by the taxpayer from different sources, such as salary, interest, dividend, capital gains, etc.

Why are both documents important?

Experts believe that while filing income tax returns, one should pay attention to the information given in both AIS and Form 26AS. The Income Tax Department says that now the main focus in Form 26AS will be only on TDS and TCS information. Apart from these, information about other taxes deposited by the taxpayer, such as self-assessment tax, advance tax etc. will now be given in AIS. Obviously, in this situation, the information given in both documents will have to be used while filing ITR.

What to do if there is a mismatch in information in Form 26AS and AIS?

This question may also arise in the minds of taxpayers what to do if there is a mismatch in the details given in Form 26AS and AIS while filing ITR? At the time of launching AIS, the Income Tax Department had made it clear that if any details related to payment of tax like TDS or TCS are different in Form 26AS and AIS available on the TRACES portal, then the taxpayers should give the same in Form 26AS while filing ITR. The information given should be trusted. But this was said while launching AIS. It should be expected that AIS would have improved significantly since then. The possibility of there being much difference in the information given in Form 26AS and AIS is also less because generally, the sources for obtaining information are common for both documents. For example, TDS returns filed by the tax deductor or other statements related to financial transactions.

What to do if there are mistakes in both AIS and Form 26AS?

In some cases it may happen that wrong information has been given in both AIS and Form 26AS or the data has not been updated. In such a situation, the taxpayer must have valid documents of the financial transactions done during the relevant financial year, such as bank statements, passbook, demat statements or sale deed etc. With the help of these documents, the taxpayer can give feedback to correct the mistakes in AIS. Similarly, if there is any discrepancy in the information given in 26AS, the taxpayer can contact the TDS deductor and ask him to make corrections in his TDS return. If the TDS deductor does not do so, you can get the necessary corrections done in the return with the help of your CA. But in such a situation, you should have a valid document as proof of that transaction, so that it can be provided on demand by the Income Tax Department.