We get your business up and moving. We are a passionate bunch of number crunchers /budget heads. Whether it be an entire overhaul of your accounting department, managing your payrolling, or simply serving you as a bookkeeper – we are here.
The Income Tax Department introduced the comprehensive Annual Information Statement (AIS) in November 2021, providing taxpayers with detailed financial information beyond what Form 26AS offers. This expansion of available data brings significant implications for tax compliance and financial record-keeping for individual taxpayers, businesses, and tax professionals alike.
In this article, we will cover everything you need to know about AIS, how to access AIS, and why it is helpful.
The Annual Information Statement or AIS, refers to the statement containing tax-related information collected by the Income Tax Department from various sources about a taxpayer. It functions as an extension to Form 26AS, delivering a more detailed view of financial activities.
The introduction of AIS stems from the government’s initiative to increase transparency and reduce tax evasion through comprehensive data collection and analysis. While Form 26AS primarily focuses on TDS/TCS details and certain high-value transactions, AIS expands this scope by incorporating data from multiple reporting entities, including banks, financial institutions, registrars, companies, and other specified persons under Section 285BA of the Income Tax Act.
The primary objectives behind implementing AIS include:
Many think that AIS is a replacement for Form 26AS. However, that is not true. These documents coexist and complement each other with distinct purposes. Form 26AS continues to serve as the official TDS certificate, while AIS provides additional information on the details of Form 26AS.
Key distinctions between Form 26AS and AIS include:
| Parameter | Form 26AS | Annual Information Statement (AIS) |
| Legal Status | Statutory tax credit statement under Section 203AA | Comprehensive information statement under Section 285BA |
| Primary Focus | TDS/TCS transactions | All reportable financial transactions |
| Information Sources | Limited primarily to deductors/collectors | Multiple sources, including banks, registrars, companies, etc. |
| Transaction Scope | Primarily tax-deducted transactions | Includes non-TDS transactions like high-value purchases, investments, etc. |
| Update Frequency | Quarterly | More frequent updates throughout the year |
The Annual Information Statement organises information into several distinct parts, each containing specific categories of financial data:
This section contains foundational taxpayer details, including:
Regular verification of this information ensures accuracy in tax department communications and proper attribution of financial transactions.
Part B is divided into 5 segments.
| Section | Details | |
| 1 | TDS/TCS Information | – Name of the deductor/collector
– Section under which TDS/TCS was deducted/collected – Date of transaction – Amount paid/credited – TDS/TCS amount – TDS/TCS certificate number – Assessment Year – Quarter of deduction/collection – Transaction unique reference number – Status of TDS/TCS (paid/not paid by the deductor) |
| 2 | Statement of Financial Transaction (SFT) Information | – Banking Transactions
– Investment Transactions – Immovable Property Transactions – Other High-Value Transactions Each transaction includes: – Transaction date – Amount – Counterparty details – Unique transaction references |
| 3 | Payment of Taxes | – Advance tax instalments with challan details
– Self-assessment tax payments – Regular assessment tax – Tax paid on demand – Interest payments under various sections – Date of payment – BSR code – Challan serial number – Bank branch details – Minor head codes Provides a consolidated tax payment history. |
| 4 | Demand and Refund | – Outstanding demand details with section references
– Demand identification numbers – Dates of raised demands – Status of demands (pending/partially paid/appealed) – Refund details with refund identification numbers – Dates of refund processing – Modes of refund (direct credit/physical check) – Bank account details where refunds were credited – Status of refunds (processed/pending/failed) |
| 5 | Other Information | – Pending proceedings information
– Specified financial transactions not categorised elsewhere – Off-market transactions by depositories – Annual Property Return of government employees – Overseas assets and income through automatic exchange This section includes uncategorized but relevant tax compliance data. |
The process for accessing AIS involves the following detailed steps:
Technical requirements for optimal AIS access include:
Regular monitoring of AIS (recommended quarterly) rather than only during tax filing season allows for early detection of discrepancies and sufficient time to address issues before they escalate.
Imagine you are a manufacturing business owner who received a notice under Section 148A in March 2024 for unexplained cash deposits of ₹42 lakhs across multiple accounts. While these transactions were absent in Form 26AS, they appeared in the AIS but were not reported in the ITR. The tax department subsequently initiated reassessment proceedings, demonstrating how AIS data is actively utilised for compliance enforcement.
The importance of AIS includes several key aspects affecting different taxpayer categories:
| Category | Details | |
| For Individual Taxpayers | Comprehensive Financial Profile | Captures income from various sources, including outside the TDS framework. |
| Pre-emptive Compliance | Enables identification and reporting of all taxable income before notices are issued. | |
| Documentation Alert | Acts as a reminder to maintain supporting documents for high-value transactions. | |
| Tax Planning Opportunities | Provides complete information for better utilisation of deductions and exemptions. | |
| For Business Entities | Transaction Mapping | Facilitates reconciliation of reported sales/purchases with counterparty reports. |
| GST-Income Tax Reconciliation | Cross-references information with GST returns for consistency. | |
| Director/Partner Transactions | Personal AIS of directors/partners highlights transactions requiring disclosure in business accounts. | |
| Business Expense Verification | Verifies whether substantial expenses are properly reflected in financial statements. | |
| For Tax Professionals | Client Risk Assessment | Serves as a tool for evaluating compliance risks in client portfolios. |
| Pre-filing Verification | Supports comprehensive checks before ITR submission. | |
| Documentation Management | Identifies areas needing additional documentation support. | |
| Strategic Advisory | Enables proactive advice on potential discrepancies and remedial measures. | |
TIS is Taxpayer Information Summary. Both TIS and AIS serve different purposes. For those finding the detailed information in AIS overwhelming, the TIS can offer a structured solution. TIS provides a simplified version of AIS, showing aggregated year-wise information organised into categories:
The primary differences between AIS and TIS include:
| Feature | AIS | TIS |
| Detail Level | Transaction-wise detailed information | Aggregated summary information |
| Purpose | Comprehensive review and reconciliation | Quick reference for tax filing |
| Data Organization | Organized by information source | Organized by income heads and ITR structure |
| Update Cycle | Updated as new information is received | Updated after AIS processing |
| Technical Format | Multiple formats, including JSON | Primarily ITR-friendly format |
Maximising the benefits of AIS requires a proactive approach with systematic implementation:
Implementing a structured monitoring calendar is important:
This systematic approach ensures continuous compliance monitoring rather than reactive responses.
Effective comparison of information requires a structured reconciliation process:
| Step | Details |
| Step 1: Information Compilation | – Extract relevant AIS sections
– Compile Form 26AS information – Gather personal financial records – Collect bank and investment statements – Retrieve property transaction documents – Organise business transaction records |
| Step 2: Categorisation | – Group information by transaction type
– Segregate by financial year/assessment year – Organise by income heads as per ITR – Flag high-value transactions – Identify potentially duplicate entries |
| Step 3: Cross-verification | – Match transactions across different sources
– Reconcile differences with supporting documentation – Identify genuinely missing transactions – Calculate aggregate differences – Document explanations for variances |
| Step 4: Discrepancy Resolution | – Prepare feedback for AIS portal for clear errors
– Document legitimate explanations for real differences – Update accounting records if internal errors are found – Prepare disclosure notes for ITR filing – Maintain reconciliation worksheets for future reference |
Upon discovering an error, a systematic resolution approach is needed:
Ensuring proper compliance with AIS involves several key methodologies:
Start by downloading the latest AIS and TIS 45 days before filing and comparing them with financial records. Perform line-by-line verification of significant transactions, identifying those requiring inclusion in the ITR while flagging exemptions. Reconcile TDS/TCS credits with Form 26AS and ensure adequate documentation exists for all material transactions.
Structured Approach to Information Gap Explanation
When returns exclude AIS-reported transactions, categorise them appropriately as exempt income, non-taxable receipts, previously taxed income, or reporting errors. Maintain comprehensive documentation supporting your position and include appropriate disclosures in relevant ITR schedules to provide context.
When discrepancies are identified, evaluate materiality before submitting feedback through the AIS portal. Document the submission process with screenshots and acknowledgements, follow up after 30 days, and record outcomes systematically to assess impact on your overall tax position.
For complex situations, seek professional guidance on legal characterisation of transactions, especially those spanning multiple years or jurisdictions. Tax professionals can help develop disclosure strategies that balance transparency with legitimate positions and provide documentation that strengthens your compliance stance.
The Annual Information Statement represents a significant enhancement to tax compliance monitoring in India, working alongside Form 26AS to provide a more comprehensive view of financial activities. This technological integration of multiple data sources fundamentally transforms the relationship between taxpayers and tax authorities by creating unprecedented transparency and visibility.
GJM & Co‘s taxation experts provide specialised assistance in navigating the complexities of AIS and Form 26AS. Our professional team offers comprehensive services including Financing, Taxation, Business Formation, Payroll Management, Bookkeeping and Accounting Services, and more. To know more, email us at info@gjmco.com or call us.