Tax is the primary source of revenue for Government in India, and thus, various forms of income...
The Income Tax Department has announced the release of the Annual Information Statement (AIS), which will give you nearly all of the facts regarding your financial activities for the year.
India is expediting tax compliance with the help of digitization and greater access to information and is providing increased opportunities for self-assessment. The new Annual Information Statement is the most recent of such measures, although it will be used in conjunction with the current Form 26A until the income tax department advises otherwise. The consolidated statement, which can be viewed via the taxpayer’s PAN number and provides additional categories of information, is available on the income tax compliance portal.
The income tax department has released AIS on its platform, which not only provides a full overview of the taxpayer’s information but also enables the taxpayer to offer input on the information supplied. The new annual information statement will make it a lot easier for taxpayers to examine tax-related information on their multiple earnings in one place, thereby making tax filing easier.
If a taxpayer discovers information in the AIS that is erroneous, duplicated, or belongs to a different fiscal year, he or she can submit it in the form of feedback. The Central Board of Direct Taxes (CBDT) clarified that the income tax depositors are urged to evaluate the information displayed in the annual information statement (AIS) and submit feedback if the information requires any type of revision or correction.
The AIS records practically all financial transactions that occurred in the preceding fiscal year.
It covers, among other things, interest earned on your savings bank accounts, interest earned on fixed and recurring deposits, dividend pay-out, acquisition of securities and mutual fund units, proceeds on the sale of securities and mutual fund units, off-market credit transactions, international remittances, and your salary income.
The goal of the annual information statement is to provide taxpayers with a detailed account of their transactions that they may use to file their income tax returns.
On the one hand, the AIS is supposed to assist taxpayers by providing information of all transactions where their PAN is reported by the relevant reporting body and preparing them in advance for any required discussions with tax authorities. On the other hand, this AIS offers the tax authorities a full information database about the taxpayer’s transactions assembled at a single location.
Because taxpayers may review the information ahead of time and have wrong information corrected before filing their ITR, it also minimizes the inconvenience of dealing with IT department inquiries for minor inaccuracies.
To address tax breaches, the CBDT has updated ITR forms in recent years to seek comprehensive disclosures and also expanded the range of information in Form 26AS. With the introduction of AIS, the assessment will get even more stringent and the taxpayers will have fewer opportunities to conceal income in their ITR forms.
With the launch of the annual information statement, tax depositors would need to monitor/ examine their AIS on a regular basis and keep an eye out for any transactions reflected in their AIS. If they suspect that any wrong information has been recorded in their AIS, they should contact the reporting body promptly and save all relevant paperwork to establish that the incorrect transaction reported in their AIS does not pertain to them.
According to the CBDT’s official declaration, AIS may progressively replace Form 26AS. However, for the current assessment year, a taxpayer must match the information supplied in Forms 26AS and AIS. If there is a discrepancy between the information in AIS as provided on the IT website and Form 26AS on the TRACES portal, the taxpayer should use the latter, according to the CBDT.
The objectives of the introduction of AIS are as follows:
A taxpayer must declare all essential data in the Income Tax Return (ITR) that are important for calculating his or her total income earned during a financial year. While the information on salary income may be obtained in Form 16 and information on interest on Fixed Deposit (FD) etc. can be found in Form 16A, it is difficult to acquire specifics for those earnings where no tax is deducted at source (TDS).
Taxpayers can utilize Form 26AS to obtain complete details of the income and tax. Form 26A, however, primarily provides information on that income from which tax has been deducted as TDS.
As a result, most non-TDS incomes – such as interest on a savings bank account, dividends, capital gains on the sale of capital goods such as property, shares, mutual fund units, dividends, and so on – are not revealed by Form 26AS. As a result, taxpayers must acquire such information independently even after downloading Form 26AS, which 26AS does not show.
To address this issue and make the filing of income tax returns easier for taxpayers, the Annual Information Statement (AIS) has been established, which seeks to incorporate practically all of the information required to submit an ITR.
For the time being, Form 26AS will not be discontinued, and a taxpayer can access both Form 26AS and AIS at the same time. As a result, knowing and submitting details for your ITR will be very simple.
The AIS may be obtained from the e-filing system of income tax (i.e., incometax.gov.in). Go to the services tab and choose the AIS option from the dropdown list once you’ve logged in.
In addition to the comprehensive AIS, the site will provide a tax information summary (TIS), which comprises the aggregate value to be utilized during the tax filing process.
The TIS displays the processed value (which is the value obtained after information de-duplication based on pre-defined criteria) as well as the derived value (which is the value derived after considering the taxpayer’s feedback and processed value). If a taxpayer provides input on AIS, the derived value of information in TIS will be instantly updated in real-time, according to the CBDT.
The Income Tax Department has been producing Form 26AS to give information on a taxpayer’s taxable income and tax deducted at source (TDS) for the past few years, but it will soon be replaced by the Annual Information Statement (AIS).
As compared to Form 26AS, AIS is a significantly more comprehensive form, with many more details of income tax available, such as interest credited to your Savings Bank Accounts, all Mutual Fund (MF) transactions for the year, and so on.
AIS is a more extensive version of Form 26AS that provides a complete financial overview of all data filed with the income tax department. As a result, AIS would make it easier to file an Income Tax Return (ITR) by giving more information in one place than Form 26AS.
The press release of the IT department on the rollout of the new annual information statement is as follows:PressRelease-Roll-out-of-the-new-Annual-Information-Statement-AIS-1-11-21