What is AIS, how to download it and how it helps taxpayers in ITR filing?

Before AIS, form 26AS served, for many years, as a consolidated tax statement offering a comprehensive overview of a taxpayer's transactions encompassing details such as TDS, TCS, advance tax and self-assessment tax. In 2019, the tax department extended the usage of AIS by introducing the facility of pre-filled tax returns based on the information already available with them.

AIS was introduced by the tax department to display complete information about an individual's income in a financial year, to the taxpayer, with a facility for the taxpayer to give feedback online. AIS further promotes voluntary compliance, enables seamless pre-filling of income tax return and deters non-compliance.

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AIS provides information about an individual's income during any given financial year, from interest, dividends, rental income, GST turnover, securities and mutual fund transactions, foreign remittance details, as well as high-value transactions such as real estate, amongst many others. While Form 26AS serves as a comprehensive record of all Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) from the taxpayer, AIS helps taxpayers compile and report income from a variety of sources for tax purposes. Further, since FY 2022-23, advance, self and regular assessment taxes paid by an individual, reflect in AIS, instead of in Form 26AS earlier.

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Accordingly, AIS can be seen as an extension of Form 26AS which offers a detailed breakdown of a taxpayer's financial transactions and tax-related activities throughout a fiscal year. It includes details of capital gains from listed securities, dividend income, and interest from banks, post office, etc. to further ease filing of returns for taxpayers.

Below are few screenshots illustrating how interest income details are captured in AIS statement:

AIS offers taxpayers a comprehensive overview of their financial information, aiding in easier tax compliance. Taxpayers can also submit online feedback on AIS's information to ensure correct reporting of their income.

How to download AIS from income tax e-filing website

To access AIS, taxpayers need to log into their e-filing account on the income tax portal using their username (PAN or Aadhaar) and password. Once logged in, they can navigate to the AIS portal to view their statement. AIS can be downloaded in PDF, JSON, and CSV file formats. To enhance accessibility, the income tax department has also launched a free-of-cost mobile application namely "AIS for Taxpayers", providing a comprehensive view of AIS and enabling responses through mobile devices.

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You can access the Annual Information Statement functionality by following below mentioned steps:

Step 1: Login to URL https://eportal.incometax.gov.in/iec/foservices/#/login

Step 2: After login, click Annual Information Statement (AIS) menu on dashboard.

Step 3: Click on Proceed button which will redirect to AIS Portal

Step 4: Click on AIS tile to view the Annual Information Statement. 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 name.

Alternatively,
Step 1: Login to URLhttps://eportal.incometax.gov.in/iec/foservices/#/login
Step 2: After login, click e-File menu.

Step 3: Click on Income Tax Return View AIS.

How does Annual Information Statement (AIS) help taxpayers in ITR filing?

By capturing a broad spectrum of income sources, AIS assists both taxpayers and tax authorities in ensuring that all taxable incomes are accurately reported.

AIS assists taxpayers in saving time on data collation for ITR filing process. Further, it provides a feedback mechanism allowing the taxpayer to object to any information if it has been misreported by the source, preventing the initiation of litigation. Last but not least, the information collated through AIS and third-party sources has also helped in faster processing of income tax returns, resulting in quicker tax refunds for taxpayers.

The income tax department also uses the information received through the AIS functionality to verify the information declared by a taxpayer in the income tax return and detect non-filers of ITR. This process has also assisted the income tax department to identify unreported income, leading to a significant increase in tax collections.

Continuous enhancements are being made to the AIS data system to enhance accuracy and incorporate new data sources, sections and information. This is evident in many AIS functionality updates made by the tax department, which illustratively include refund/ demand information, the cost of acquiring shares sold, rental income received (in cases where tenants have claimed House Rent Allowance exemption via their employer), substantial cash deposits and withdrawals from bank accounts, and comprehensive information for properties bought or sold during the year.

While there have been many enhancements in the AIS functionality, there are several areas where the authorities may focus by incorporating additional information to transform the AIS into a definitive reference document. Hence, one cannot fully rely on the AIS to file their income tax return. One should cross-check other documents as well to inform all the incomes in the ITR form.

These improvements can be in the form of correction/completeness in existing data points such as reporting the actual sale date instead of settlement date for capital gain computation, segregation of refund and interest on income tax refund, reporting of correct rental amount instead of house rent allowance exemption amount claimed by the tenants. Further, it has been observed that tax payments are updated in AIS according to the date of payment. To ensure proper reporting, tax payments may be appropriately reflected as per the assessment year to which it pertains instead of basis the date of payment.

Including such data points accurately in AIS would enable taxpayers to verify and reconcile their transactions more effectively on a transaction-by-transaction basis, simplifying the income reporting process in their tax returns. It is thus imperative for the authorities to continue the focus on digitization within the tax domain and further augment the functionality of AIS.

(The article is written by Divya Baweja, Partner, Deloitte India.)