Reading Your Income Tax Statement: Form 26AS and AIS
To Understand and reading tax your statements is part of managing finances and fulfilling tax. For this, there are 26 AS and AIS statements that come into the picture, like the Form 26AS and Annual Information Statement (AIS). Both are insightful about your financial movements, but differ in their purposes.
We will learn what each statement means, how to retrieve them, and how to read and validate the contents of each to make sure that we get it right while filing our taxes.
What is Form 26AS and AIS?
Since Form 26AS presents an annual consolidated statement of all tax-related information, it would be a relatively more comprehensive view of financial activities reported by various entities to the Income Tax Department. Where the principal view on taxes paid and deducted would be seen on Form 26AS, the AIS captures more details in terms of high value transactions, investment, and even sources of income from abroad. The combination of both statements will eventually give an overall picture of all your financial activities with proper accuracy in filing income tax.
What is Form 26AS?
The Form 26AS is that annual statement as provided by the Income Tax Department and also provide particulars of taxes deducted or collected at source, taxes paid and any refunds issued during any particular financial year. Therefore, a Form 26AS is indispensably required for all taxpayers to cross-check on TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) and taxes paid on one's behalf by employers or other entities..
The Key Uses of Form 26AS are as follows:
It helps to confirm the tax credits claimed on your income tax return ITR.
Ensures accuracy of TDS and TCS data.
Helps to track refunds issued by the Income Tax Department.
What is Annual Information Statement (AIS)?
The Annual Information Statement or AIS is one of the complex statements of the Income Tax Department, which provides all kinds of financial transactions, including receipt of income, interest, dividend, high-value purchases, and remittances abroad. Essentially, AIS is an elongated version of Form 26AS that serves the purpose of superior transparency regarding all reported financial activities.
Key Usage of AIS
It offers a consolidated view of financial transactions for better tax reporting.
- Allows taxpayers to cross-check and correlate the details reported with their own records.
- Flags high-value transactions reported by banks/financial institutions.
Viewing Form 26AS and AIS
You have both Form 26AS and the AIS on the Income Tax e-Filing Portal.
1. Click to “Income Tax e-Filing Portal”. i.e. (https://www.incometaxindiaefiling.gov.in).
2. For Form 26AS:
Click to View “Form 26AS" from the "My Account".
You will be automatically redirected to the TRACES website where it is displayed or downloaded from.
3. Select AIS From the "Services" category, select "Annual Information Statement (AIS)".
- You will be pass on to the AIS portal, in which you may view or may download your AIS in PDF / JSON format.
What's on Form 26AS?
Form 26AS is divided into several parts, containing different head of tax information. Here's a breakdown:
Part A: TDS Information
- What it Covers: TDS over income-generating heads such as salaries, interest, dividend, and professional fees and the details: like Name and TAN of the detector, amount of TDS deducted and deposited.
Part B: Details of Tax Collected at Source (TCS)
- What it Covers: TCS on specific goods purchases-for example, scrap, alcohol.
- Details: Name and TAN of the collector, TCS amount collected.
Part C: Details of Tax Paid (Other than TDS or TCS)
- What it Covers: Self-assessment tax, advance tax, and other tax payments.
- Details: Challan number, amount paid, date of payment.
Part D: Details of Paid Refunds
- What it Covers: Refund sanctioned by the Income Tax Department.
- Details: Mode, date and amount of refund; interest on refund if any.
Part E: SFT (Specified Financial Transactions) Information
- What it Covers: Any large transaction that includes purchasing property or investing in mutual funds.
- Details: This will include transaction type, amount, and reporting entity.
Part F: Tax Deducted on Sale of Immovable Property
- What it Covers: There is cover the TDS on sale of immovable property.
- Details: you will find there the details of the buyer and seller, date of transaction, and amount.
Part G: Defaults in TDS Statements (Processing of Statements)
- What it Covers: Defaults in TDS statements filed by deductors.
- Details: List of defaults with interest or penalty amounts.
Understanding the Components of AIS
The AIS is more inclusive and covers more financial transactions. This is what each of them contains:
1. TDS/TCS Information
- What it Covers: This section, much like Form 26AS, contains the details of TDS and TCS sourced from various places.
- Details: Such as source income, name of the deductor, and amount deducted.
2. SFT (Specified Financial Transactions)
- What it Covers: It is high-value financial transactions.
- Details: Which can be reflected in details of SFT such as mutual fund purchases, property sales, and credit card payments.
3. Income Information
What it Covers : Detailed sources of income, such as:
- Interest Income through bank deposits
- Dividend Income through stocks or mutual funds
- Capital Gains from selling securities or properties
4. GST Data
What it Covers : GST related information on the business
Details : Information regarding GST turnover and tax liability
5. Foreign Remittance Information
What it Covers : Income or transfer of foreign money.
- Information: Sum sent amount, purpose, and currency.
6. Other Information
- What it Covers: Miscellaneous information filed by a financial institution.
- Details: Includes sources that are not to be covered under specific sections, for example, pay made in accordance with an insurance policy.
7. Cross-verifying Information Between Form 26AS and AIS
While preparing your Income Tax Return, cross verification of information between Form 26AS and AIS is most important to ensure no inaccuracies are contained. Otherwise, discrepancies may creep in. Here are some steps of verification:
1. TDS Details: Confirm your TDS details in both statements correspond with the income sourced from salary, interest, etc.
2. Verify Income Sources in AIS: Verify all income entries on the AIS, which include interest income, dividends, and capital gains. Compare these with your own records.
3. Verify Large Value Transactions: Crosscheck large value transactions, like mutual fund purchase, property sale, credit card spending, etc.
4. SFTs should not be Inconsistent: Compare Specified Financial Transactions in AIS with those in Form 26AS to ensure that no major transaction is missed or duplicated.
8. Key Takeaways and Lessons
1. Frequent review: Regularly log into your Form 26AS and AIS to locate mismatched entries and correct just before the date of filing your Income Tax Return.
2. Update personal records: Proper records of all the income, tax paid, investments and high-value transactions; compare the same with the Form 26AS and AIS.
3. Contact a Deductor for Mistakes: If the TDS details do not match with records, then get in contact with the deductor, like employers or banks to set the things right.
4. Be Careful with Big Tickets and Foreign Countries: AIS also tracks high-value transactions as well as foreign country transactions; therefore, be careful about big purchases and investments to attract the attention of audits and questions.
5. Seek Professional Counsel if Needed: In case one finds it hard to interpret such statements or if they have incongruent ones, a tax professional can be sought for one to attain accuracy and compliance.
If you want more information, may check link https://www.incometax.gov.in/iec/foportal/ais-faq
Conclusion
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Income Tax