Decoding Annual Information Statement (AIS): Taxmen may know more about you than yourself

5 min read | Updated on June 05, 2025, 15:42 IST

SUMMARY

AIS is a relatively new feature on the income tax e-filing portal. It provides taxpayers with a complete view of their financial data as reported to the income tax department. It’s an enhanced Form 26AS that not only shows TDS and high-value transactions but also a wide range of other data.

If you find discrepancies, the AIS portal lets you submit feedback to correct them. | Image source: Shutterstock

The income tax department, through your Annual Information Statement (AIS), now knows a lot more details about your investments, incomes, and how much you are spending.

The AIS is a consolidated record of all your tax-related financial information. You can then view or download your AIS on the official e-filing portal at the Income Tax portal.

It’s not merely the extended version of the Form 26AS. It includes details such as bank interest, dividends from companies and mutual funds, foreign dividend income, purchase or sale of stocks, mutual funds, ETFs, real estate, etc.

If your investments exceed your income, the income tax may levy penalties on you for under-reporting or mis-reporting of income, which may be up to 200% of your underpaid tax liabilities. In addition to this, interest of 24% p.a. may be levied under Sections 234B and 234C of the Income Tax Act, 1961.

For example, unlike the Form 26AS, the AIS includes the following:

Type of Income / transaction	Source of information
Interest from savings & fixed Deposits	Banks and financial institutions (via TDS returns – Form 26Q, and SFT under Rule 114E)
Dividend income	Companies and mutual funds (via TDS returns – Form 26Q, and SFT reporting)
Rent received	Tenants (via TDS returns – Form 26QC, Form 26Q)
Purchase/sale of securities	Stock brokers, depositories, mutual fund companies (via SFT – Form 61A)
Purchase/sale of immovable property	Registrar/Sub-Registrar offices (via SFT reporting and TDS returns – Form 26QB)
Foreign remittances	Authorized dealers (banks/financial entities via Form 15CA/CB & SFT under Rule 114E)
GST turnover (for businesses)	GST Network (GSTN) via data sharing arrangement with Income Tax Department

How does the Income Tax Department use this data?

The Income Tax Department gathers data from multiple sources, including property transaction details from registrars, sale and purchase records in GST returns, and investment details from brokers. This information is then cross-verified with the particulars reported in your ITR. For instance, if your declared income for the year is ₹25 lakh, but your Annual Information Statement reflects investments worth ₹40 lakh purchased during the year, a notice may be issued to seek clarification on the discrepancy.

This could be out of your surplus last year or from other sources previously disclosed. But if you are unable to justify this, such mismatches could lead to payments up to 200% of the taxes under Section 270A, along with additional interest of 24% per annum (2% per month or part thereof) under Sections 234B and 234C.

Objectives of AIS

Its objectives are to “display complete information to the taxpayer with a facility to capture online feedback”, enable pre-filling of tax returns, and deter non-compliance.

In practice, this means that when you file your ITR, most of your income figures (interest, dividends, capital gains, etc.) can be auto-filled from AIS, and you can see if anything is missing or incorrect.

If you find discrepancies, the AIS portal lets you submit feedback to correct them (more on this below).

Correcting AIS errors with feedback

The AIS portal allows taxpayers to submit feedback on any errors or omissions in the reported entries. To correct an entry, locate the item (like FD interest, dividend, or transaction that needs fixing), then click the "Optional" or "Add Feedback" button.

How to avoid Income Tax notices using AIS

The AIS acts as a proactive compliance tool to help taxpayers avoid mismatches that could trigger income tax notices.

Your income disclosed in ITR is way less than your investment value in the AIS then it may trigger a notice from the Income Tax Department seeking clarification and by reviewing AIS thoroughly before filing your ITR, you can identify discrepancies in reported income—such as interest, dividends, capital gains, or property sales—and correct them upfront.

Ensure that all income reflected in AIS is either accurately included in your ITR or responded to through the AIS feedback mechanism.

Additionally, manually report any income not captured in AIS, like foreign dividends, to avoid underreporting.

The AIS is a powerful tool for every taxpayer. It collects a wide array of financial data — from bank interest and dividends to stock trades and property deals — in one place. By regularly reviewing your AIS, you can catch missing income, verify taxes already paid and ultimately file a more accurate tax return.

Always reconcile AIS with your own records (bank/broker statements, contracts, etc.) and with Form 26AS (your tax credit statement). Remember to include any income not reported in AIS (like foreign dividends) in your return.