Picture this: You’re finally sitting down to file your Income Tax Return (ITR). You open your Annual Information Statement (AIS) on the income tax portal, expecting to see neat, accurate details of your trades. Instead, you spot bizarre entries: share purchases with ₹0 cost, duplicate transactions, or missing dates. Your heart sinks — it looks like you’ve made massive capital gains you never actually earned.
If this sounds familiar, you’re not alone. In the past few months, thousands of Indian equity and mutual fund investors have faced AIS mismatches, creating panic just ahead of tax filing deadlines.
What is AIS and Why is it Crucial?
The Annual Information Statement (AIS) is a consolidated record of your financial transactions, as reported to the Income Tax Department by various entities — stock exchanges, depositories, banks, mutual funds, and more.
It covers:
– Equity & mutual fund transactions
– Interest income from banks & FDs
– Dividends
– Property purchases or sales
– Other high-value financial moves
For stock market investors, AIS should auto-capture buy and sell details, helping you compute short-term and long-term capital gains. But when data is wrong, it can inflate gains, increase your tax liability, or even trigger scrutiny notices.
The Root of the Mismatch Problem
Common AIS mismatch issues include:
1. Zero-cost purchases — Old holdings or bonus/split shares recorded with ₹0 purchase price, making entire sale value taxable.
2. Duplicate transactions — Same sale shown twice by different entities.
3. Missing purchase dates — Leads to gains being taxed as short-term.
4. Gifted/transferred shares — Incorrect cost data carried over.
Why This Matters for Your Taxes
– Overstated tax liability → You may pay more tax than necessary.
– ITR-AIS mismatch alerts → Can trigger Section 143(1) notices.
– Audit risk → Increased scrutiny from the Income Tax Department.
How to Fix AIS Mismatches Before Filing
1. Download & Review AIS — Login → Services → Annual Information Statement → Download PDF/JSON.
2. Compare with Broker/Demat Records — Match each trade with actual statements.
3. Submit Feedback — Mark incorrect entries and update correct data.
4. Keep Proof Ready — Contract notes, corporate action proofs, and ledger statements.
5. Use Correct Figures in ITR — File on actual gains, not AIS errors.
6. Follow Up — Keep record of feedback even if AIS doesn’t update before filing.
Looking Ahead
Experts expect AIS reporting to improve in coming years. Till then, careful cross-verification and timely corrections remain the best defense against tax troubles.
FAQs
Q1: Will my ITR be rejected if I don’t correct AIS?
No, but mismatches may lead to notices seeking clarification.
Q2: Can I ignore AIS if my broker statement is correct?
You should still submit AIS feedback to prevent future queries.
Q3: What if I find errors after filing?
You can file a revised return within the allowed time under Section 139(5).
Q4: How can I avoid mismatches next year?
Check AIS early and maintain all transaction records.
Final Word:
AIS is a great tool for transparency, but only if you verify it carefully. For Indian investors, especially during a volatile market year, cross-checking AIS with your own data is essential to avoid inflated tax bills and unnecessary notices.
Stox N Tax 
Leave a comment