IT Department Launched Annual Information Statement (AIS) That Will Replace Form 26AS

AIS is an Annual Information Statement launched by the income tax department. Presently, Form 26AS offers detailed information relating to the tax deducted, tax collected, self-assessment or advance taxes paid, etc., related to the taxpayers. 

The new AIS statement is all set to replace the existing Form 26AS. However, the income tax department has clarified that till this new statement is entirely operational, Form 26AS will continue to be available on the TRACES portal. 

The Annual Information Statement will include new categories of taxpayers’ information like interest, dividend, mutual fund transactions, foreign remittances, etc. 

On the 26th of October 2021, the Central Board of Direct Taxes (CBDT) issued an order to report additional details in AIS, as follows:

• Foreign remittances made by the taxpayer
• Details of mutual fund purchases and dividends received from the mutual fund units
• Salary breakup of various components to be reported by the employers
• Interest on refunds of the previous year
• Off-market transactions reported by depository/Registrar and Transfer Agent (RTA)
• Other taxpayers information in ITR

How will AIS be useful?

• The new AIS statement will replace a more comprehensive view of the existing Form 26AS ( tax credit statement).
• The new AIS will be used to pull out data and provide pre-filled returns to the taxpayers. However, pre-filling of data will happen in a phased manner, as stated by the income tax department.
• The department is also working to remove errors or duplication of the information in the new report. It also has an embedded facility to submit online feedback for details reflecting in the new AIS. If any detail in AIS is inaccurate or does not relate to taxpayers’ transactions, the taxpayer can provide feedback requesting a modification. Feedback can be submitted for bulk information. Further, an AIS offline utility has also been provided to upload feedback in an offline manner. The income tax department stated that the reported value and the value modified after feedback would be shown separately. Also, if the feedback is not accepted, then the information source can be contacted for confirmation. The taxpayers can download the AIS in different formats like PDF, CSV as well as JSON.
• The AIS report will have two parts: (i) Taxpayers Information Summary (TIS) and (ii) Annual Information Statement (AIS). TIS is a simplified statement that will be generated for each taxpayer. The TIS will show aggregate value for the taxpayer for ease of filing a return. TIS shows the processed value (i.e.the value generated from the information source of the income tax department) and derived value (i.e. the value modified after considering the taxpayer’s feedback and processed value). On submission of feedback by the taxpayers, the derived information in TIS will be automatically updated on a real-time basis.
• The new AIS statement will simplify the ITR filing for taxpayers as more details will be available in just one statement. Taxpayers will be able to identify incorrect information reported in AIS and provide feedback for taking corrective action.
• Also, tax authorities would easily compare the information reported by the taxpayer with the source to identify any mismatch. A genuine error can be resolved quickly, and the exchange of notices from the income tax department would be reduced. This will also help in reducing the tax leakages, if any.

Why have the changes been made in the form?

The new AIS will facilitate voluntary compliance by the taxpayers.  

Taxpayers will become more vigilant with the ITR filing requirements and the Income Tax Act. The taxpayers will have to be meticulous in calculating the exemptions and deductions. 

The new AIS will also include mutual fund investment details like purchases or dividends earned. Also, foreign remittance details in the hands of authorities will increase compliance with the Income Tax Act and FEMA Act. The new AIS will also include details of off-market transactions, which will not escape reporting. 

Taxpayers may consider reviewing the new AIS statement in intervals during the year to ensure all the details are reported correctly.

How can it be accessed?

The below-mentioned steps could access the new AIS:

1. Log in to your income tax account- click here

2. Select the ‘Annual Information Statement’ from the ‘services’ tab. AIS is the last option in the drop-down.

3. A new tab will appear with two parts. (i) TIS- Taxpayers Information Summary (ii) AIS- Annual Information Statement. TIS is a summary, whereas AIS will be a detailed statement. You will find a ‘download’ arrow on the bottom right-hand corner of each part.

4. When you click on download, select the format (PDF). A PDF file will get downloaded to your device. The file will be password protected. Password would be PAN (in the capital) + Date of birth (DDMMYYYY).

For any clarifications/feedback on the topic, please contact the writer at jyoti.arora@cleartax.in