Annual Information Statement (AIS)– The income-tax department has rolled out the new Annual Information Statement (AIS) in the Compliance
section of the Income-tax portal, with the aim of bringing transparency and offering detailed information to the taxpayer. This statement is an extensive view of information for a taxpayer, even broader than Form 26AS.
What is AIS?
The AIS is a comprehensive statement containing details of financial transactions done by you and reported by various entities (mostly financial institutions) to the tax department during an FY. This includes receipt/income from different sources such as salary, interest, etc. or sale or purchase of securities such as equity shares, mutual funds, bonds, etc.
What is TIS?
This is a simplified way of viewing the information from the AIS. As per the income tax department press release, “TIS shows the processed value (i.e., the value generated after deduplication of information based on pre-defined rules) and derived value (i.e. the value derived after considering the taxpayer feedback and processed value). If the taxpayer submits feedback on AIS, the derived information in TIS will be automatically updated in real-time. The derived information in TIS will be used for pre-filling of Return
What does AIS include?
The AIS contains information related to income earned from various sources such as salary, dividend, interest from a savings account, recurring deposits, sale and purchase of equity shares, bonds, mutual funds, etc. The statement also contains information related to TDS, TCS, and any tax demand or refund.
Reason for the introduction of AIS
The Budget 2020-21 had introduced a new Section 285BB in the Income Tax Act, to revamp Form 26AS to an ‘Annual Information Statement’ which apart from the TDS/ TCS details, would contain comprehensive information relating to specified financial transactions, payment of taxes, demand/refund & pending/completed proceedings undertaken by a taxpayer in a particular financial year that has to be mentioned in the income tax returns.
Salient Features of AIS and TIS:
Additional information available- AIS and TIS provide additional information, which was not available in Form 26AS, including saving bank interest income, dividend income, details of purchase and sale of mutual funds, shares, securities, foreign remittance, etc.
Ease in filing tax returns-
A simplified TIS which shows the aggregated value of the various transactions will help the taxpayer in filing returns. Also, the pre-filling option will be available later.
Feedback–
Taxpayers will be able to submit online feedback on AIS’s information and download AIS in PDF, JSON, and CSV file formats.
How you can download AIS from the e – filing website.
Steps to download AIS from the new income tax portal
Step 1: Login into your account on the government’s e-filing portal at www.incometax.gov.in.
Step 2: Under the ‘Services’ tab, select ‘Annual Information Statement (AIS)’. A pop-up will appear on your screen. Click on ‘Proceed’. You will be redirected to another website
Step 3: On the web page tab that there are 3 taps which are Instruction, AIS & Active history. Select ‘AIS’.
Step 4: You will have to select either of the two options: Taxpayer Information Summary (TIS) or Annual Information Statement (AIS). It will also show the financial year for which AIS is being downloaded, your PAN, and your name.
Step 5: Select the download Arrow on the AIS box. A pop-up will appear asking you to select the format for downloading AIS. The statement can be downloaded in PDF format and JSON utility.
PDF is password protected.
The password to access the downloaded PDF is a combination of your PAN and date of birth.
For instance, if your PAN is AAAAA000A and your date of birth is January 1, 1991, the password for the PDF will be AAAAA0000A01011991.
Unique Features-
Since AIS/TIS is showing a summary of the financial positions of persons, it should be confidential. So for every time any one-login to income tax and click on the AIS tab –a message will be sent by the site to the person whose account is login as an intimation.
Not only that each and every time whenever you download EIS/TIS, but a message will also send to the registered person about the download.
The history will be shown under active history in AIS and there will be all records of download with time and downloaded server.
Broadly, the AIS is divided into two parts: Part A and Part B.
PART A- General Information-
It displays general information such as PAN, masked Aadhaar number, name, date of birth/incorporation/formation, contact details of the taxpayer (mobile number, address).
PART B: The following information is
provided in Part B-
1) Information relating to tax deducted or collected at source.
2) Information relating to the specified financial transaction (SFT)
3) Information relating to the payment of taxes
4) Information relating to demand and refund
5) Information relating to pending proceedings
6) Information relating to completed proceedings
7) Any other information in relation to sub-rule (2) of rule 114-I.
The key objective of AIS is:
a) Display complete information to the taxpayer.
b) Promote voluntary compliance and enable seamless prefilling of return
c) Deter non-compliance.
d) Information Deduplication is reported under different information types (e.g., reporting of interest/dividend in SFT and TDS) the information with the lower value will be marked as “Information is a duplicate / included in other information” using automated rules.
Form 26AS
Form 26AS is like a tax passbook that contains details of TDS and TCS deposited against the taxpayer’s PAN during the financial year. Further, in the amended version of Form 26AS, the information related to specified transactions such as mutual fund unit purchases, foreign remittances, etc. will be reflected only if the transaction exceeds the specified limit or where tax has been deducted. For instance, if tax has been deducted on the interest received on a fixed deposit, then it will be reflected in Form 26AS.
AIS is more comprehensive-
In the case of AIS, the transactions will be reflected irrespective of whether tax has been deducted or not. So, even if tax has not been deducted on the interest received on a fixed deposit, it will still be shown in the AIS. The statement will reflect TDS, TCS, sale, purchase of equity shares, mutual funds, dividend, interest income, etc. There is no specified limit for transactions to be featured in the AIS.
Thus, even if you invest Rs.2,000 in a mutual fund SIP it will be reflected in your AIS. Essentially, AIS reflects all the small and big specified financial transactions done by you which have been reported by various financial entities to the income tax department. Such reporting is compliance required of these entities by law. Therefore, AIS shows all the financial transactions done by you that the income tax department knows about.
Cross Checking
With the help of AIS, you can cross-check all the financial transactions that are undertaken by you and reported to the income tax department. This would help you to check and report all the required information in your income tax return. For instance, the dividend received by you in FY 2020-21 is taxable in your hands. Thus, you are required to report even an amount as little as Rs.50 in your ITR and pay tax on it accordingly. The AIS will help jog your memory if you forget to report this Rs.50.
AIS Feedback-
The taxpayer will be able to view AIS information and submit the following types of responses on the Information-
Information is correct
Information is not fully correct
Information relates to other PAN/Year
Information is duplicate / included in other information
Information is denied
Customized Feedback
AIS Feedback Processing-
The feedback provided by Assesses will be captured in the Annual Information Statement (AIS) and reported value and modified value (i.e., the value after feedback) will be shown separately.
The feedback provided by Assesses will be considered to update the derived value (value derived after considering the taxpayer feedback) in Taxpayer Information Summary (TIS)
Information assigned to other PAN/Year in AIS will be processed and information will be shown in the AIS of the taxpayer using automated rules.
In case the assigned information is modified/denied, the feedback will be processed in accordance with risk management rules and high-risk feedback will be flagged for seeking confirmation from the information source.
AIS Offline Utility
There are some Do’s & Don’ts which the taxpayer must follow to have a seamless experience in the AIS utility.”
Do’s –
• Use the latest version of the AIS utility.
• Give feedback on the information displayed in AIS.
• Check your TIS to confirm the values used for pre-filing of return.
• View your AIS regularly.
• Use the AIS utility to view AIS and provide feedback if the transactions count is high.
Don’ts
• Don’t use the old version of AIS JSON for preparing feedback through utility.
• Don’t provide incorrect feedback on the AIS information.
• Don’t share your e-filing credentials with anyone.
Variation in Information.
In case there is variation between the TDS/TCS information relating to tax payment as shown in the AIS on Compliance Portal and Form 26AS on TRACES, then the taxpayer can rely on the information present on the TRACES portal for filing of ITR and other tax compliance purposes.
AIS Information Category–
The broad categories of Information in the AIS summary view are as under:
• Salary
• Rent received
• Dividend
• Interest from savings bank
• Interest from the deposit
• Interest from others
• Interest from income tax refund
• Rent on plant & machinery
• Winnings from lottery or crossword puzzle u/s 115BB
• Winnings from horse race u/s 115BB
• Receipt of accumulated balance of PF from employer u/s 111
• Interest from infrastructure debt fund u/s 115A(1)(a)(iia)
• Interest from specified company by a non-resident u/s 115A(1)(a)(iiaa)
• Interest on bonds and government securities
• Income in respect of units of non-resident u/s 115A(1)(a)(iiab)
• Income and long-term capital gain from units by an offshore fund u/s 115AB(1)(b)
• Income and long-term capital gain from foreign currency bonds or shares of Indian companies’ u/s 115AC
• Income of foreign institutional investors from securities u/s 115AD(1)(i)
• Insurance commission
• Receipts from a life insurance policy
• Withdrawal of deposits under national savings scheme
• Receipt of commission etc. on sale of lottery tickets
• Income from investment in securitization trust
• Income on account of repurchase of units by MF/UTI
• Interest or dividend or other sums payable to the government
• Sale of land or building
• Receipts for transfer of immovable property
• Sale of vehicle
• Sale of securities and units of mutual fund
• Off-market debit transactions
• Off-market credit transactions
• Business receipts
• Business expenses
• Rent payment
• Miscellaneous payment
• Cash deposits
• Cash withdrawals
• Cash payments
• Outward foreign remittance or purchase of foreign currency
• Receipt of foreign remittance
• Payment to non-resident sportsmen or sports association u/s 115BBA
• Foreign travel
• Purchase of immovable property
• Purchase of vehicle
• Purchase of time deposits
• Purchase of securities and units of mutual funds
• Credit/Debit card
• Balance in account
• Income distributed by business trust
• Income distributed by investment fund
Analysis of one category
Interest on saving Interest-
• Information Source-Interest income (SFT-016) –Saving
• Information Description-Interest paid/credited/accrued on saving account is reported under Statement of Financial Transactions (SFT).
• Information handling-Reporting Entity reports the Interest paid/credited/accrued on a saving account held by an account holder under SFT code 016. Interest earned on a savings account is taxable in the hands of the account holder.
• Schedules-Interest from Savings Bank will be reflected in Taxpayer Information Summary (TIS) and shall be shown under the corresponding field in Schedule OS.
Disclaimer
This discussion/analysis has been presented at a high- level only on the key/critical items of relevance in the general business context. It should not be construed as comprehensive advice/ opinion.
Thought: “Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning and focused effort.” -Paul J. Meyer