Tax Talk- Annual Information Statement: Know what it reveals

The value derived after elimination of duplicate or redundant information and after considering the taxpayer’s feedback will be reflected in Taxpayer Information Summary (TIS). Accordingly, the final information appearing in the TIS will enable pre-filling of returns.

By Neha Malhotra

Form 26AS was essentially an annual tax statement that contained information on taxes already paid by a taxpayer such as tax deducted or collected at source, advance tax payments, and self-assessment tax. The Finance Act 2020 inserted a new Section 285BB to revise Form 26AS and incorporate additional information such as details of pending or completed income tax proceedings, status of income tax demand and refund, specified financial transactions undertaken by a taxpayer.

The Income Tax Department has further rolled out a new Annual Information Statement (AIS) to replace existing Form 26AS and provide more comprehensive information to a taxpayer.

What will the new AIS contain?
The new AIS shall include extra information about certain transactions and incomes including interest and dividend income, securities transactions, mutual fund transactions, foreign remittance information. In addition, comprehensive break up of salary income of a taxpayer including allowances, deductions/ exemptions claimed, any income under the head “other sources” and “house property” and the final tax liability computed by the employer shall also form a part of AIS.

The new AIS also promulgates a facility that allows a taxpayer to make modifications, if any information contained therein is misplaced. That is, if the taxpayer finds any information to be incorrect, or relating to another person/year, duplicate, etc., he can submit feedback online or even offline by using the “AIS utility”. In such a situation, the AIS will distinctly disclose the reported value and the value after feedback in the AIS. The value derived after elimination of duplicate or redundant information and after considering the taxpayer’s feedback will be reflected in Taxpayer Information Summary (TIS). Accordingly, the final information appearing in the TIS will enable pre-filling of returns.

In order to access the new AIS, taxpayers will be required to visit the new Income tax e-filing portal and click on the link “Annual Information Statement (AIS)” under the “Services” tab. The new form will be available for download in several formats including PDF.

Besides, the availability of Form 26AS on TRACES portal will remain in place until the new AIS is validated and becomes entirely operational. In case there is an inconsistency between the TDS/TCS information or the details of tax paid as displayed in Form 26AS and that appearing in AIS on Compliance Portal, the department has advised taxpayers to rely on the information displayed on TRACES portal for the purpose of filing of ITR including other tax compliance purposes.

How will the new AIS benefit?
The availability of nearly all tax-related information and reportable transactions in a single statement will facilitate ease in filing of income tax returns for taxpayers. Pre-population as well as pre-filing certification will tremendously help taxpayers in ensuring accuracy of their tax form submissions. This will, in turn, lessen incidences of scrutiny assessments.

Wide availability of information with the government about the taxpayers’ affairs will inherently discourage suppression of material information by taxpayers, thereby widening the tax base.

The writer is director, Nangia Andersen LLP. Inputs from Paridhi Sen