Introduction
Taxpayers in India are required to file their Income Tax Returns (ITR) every year, declaring their income, deductions, and tax liability. However, did you know that the Income Tax Department already has a detailed record of your financial transactions before you file your ITR?
With the introduction of the Annual Information Statement (AIS), the tax authorities now have a comprehensive overview of all your financial activities, including salary income, stock market transactions, property deals, high-value deposits, foreign remittances, and credit card expenses.
If your ITR doesn’t match your AIS, it can trigger tax scrutiny, reassessment notices, or even penalties.
This article explains:
What is AIS, and how is it different from ITR?
What financial transactions are reported in AIS?
How to check and verify your AIS before filing ITR?
What to do if there is a mismatch between ITR and AIS?
1. What is the Annual Information Statement (AIS)?
The Annual Information Statement (AIS) is a detailed financial statement generated by the Income Tax Department that records all your major transactions in a financial year. It is automatically updated based on data collected from:
Banks & NBFCs (Fixed deposits, large cash deposits)
Stock Brokers & Mutual Funds (Buy/sell of stocks, dividends received)
Employers & TDS Filers (Salary income, deductions)
Property Registrars (Property purchase/sale)
GST & Other Regulatory Authorities (Business transactions)
Think of AIS as a ‘mirror’ of your financial activities that the tax department already knows before you file your ITR.
2. How is AIS Different from ITR?
| Feature | Income Tax Return (ITR) | Annual Information Statement (AIS) |
|---|---|---|
| Who prepares it? | Taxpayer files it voluntarily | Auto-generated by the IT Department |
| Purpose | Declares income & deductions | Tracks all financial transactions linked to PAN |
| Data Source | Self-reported by taxpayer | Collected from banks, brokers, TDS filers, GST records |
| Penalty for Errors? | Yes, penalties for incorrect filing | No penalty, but mismatches may trigger tax scrutiny |
Your ITR should match the details in AIS to avoid unnecessary tax scrutiny!
3. What Transactions Are Reported in AIS?
The Income Tax Department tracks the following high-value transactions in AIS:
Salary & TDS Deductions (As reported by employers in Form 16)
Stock Market Transactions (LTCG, STCG, Dividends, Buy/Sell of shares)
Mutual Fund Investments & Redemptions
Fixed Deposits (FDs) & Interest Earned
Real Estate Transactions (Property Sale & Purchase above ₹30L)
High-Value Bank Transactions (Cash deposits over ₹10L in savings accounts)
Credit Card Bills above ₹1L (if paid in cash) or ₹10L (if paid online)
Foreign Remittances under LRS (Above ₹7L per year)
Pro Tip: Always cross-check your AIS to ensure all these transactions are correctly reported in your ITR.
4. How to Download & Verify Your AIS?
Follow these steps to access your AIS on the Income Tax portal:
Login to incometax.gov.in
Go to ‘Annual Information Statement (AIS)’ section under ‘Services’
Download the AIS report in PDF or JSON format
Compare AIS details with your personal financial records & Form 26AS
If any discrepancy is found, submit a feedback request for correction
Pro Tip: If your AIS has incorrect data, you can correct it before filing ITR by using the ‘AIS Feedback’ option on the portal.
5. How to Avoid a Mismatch Between ITR & AIS?
A mismatch between your ITR and AIS can lead to a tax notice or reassessment under Section 148. Here’s how you can avoid it:
Match your income sources in ITR with AIS before filing
Report all high-value transactions (real estate, stocks, mutual funds, bank deposits)
Use the correct PAN for all financial transactions to ensure accurate AIS reporting
Check Form 26AS along with AIS for any discrepancies in TDS deductions
If your AIS has incorrect data, submit a correction request before filing ITR
Pro Tip: Many taxpayers receive Section 148 reassessment notices because their reported income does not match AIS. Avoid this by reviewing AIS before filing ITR!
6. What Happens if ITR & AIS Don’t Match?
If your ITR has discrepancies compared to your AIS, the Income Tax Department may issue a tax notice or reassessment order.
Consequences of Mismatch in ITR vs. AIS:
| Issue | Potential Consequences |
|---|---|
| Under-reporting Income | Section 148 Notice for reassessment |
| TDS Mismatch | Delay in processing tax refunds |
| Unreported Investments | Possible tax scrutiny or penalty |
| High-Value Transactions Not Declared | IT notice or scrutiny under Section 133(6) |
Pro Tip: Always verify Form 26AS + AIS + ITR before filing to prevent issues.
7. FAQs on AIS & ITR
Q1: Is AIS Mandatory for Taxpayers?
No, but it must be checked before filing ITR to ensure accurate reporting.
Q2: What if AIS Shows Incorrect Data?
You can submit a correction request via the Income Tax portal.
Q3: Can the IT Department Issue a Notice Based on AIS Data?
Yes, if your ITR does not match AIS, you may get a scrutiny or reassessment notice.
Q4: What Should I Do If My AIS Shows Income That I Did Not Earn?
Submit feedback on AIS and inform the tax authorities before filing ITR.
8. Final Thoughts: Ensure Your ITR Matches Your AIS!
With increased tax transparency in India, it is critical for taxpayers to ensure that their ITR matches AIS to avoid scrutiny, penalties, and delays in refunds.
Key Takeaways:
AIS is a record of your financial transactions reported by third parties (banks, stock brokers, registrars, etc.)
Always download and verify your AIS before filing ITR
Any mismatch in ITR vs. AIS can trigger a tax notice or reassessment
Use the ‘AIS Feedback’ option if you find incorrect information
Pro Tip: Don’t wait until the last minute! Review AIS early and file your ITR accurately to avoid tax scrutiny!
Stox N Tax 
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