Why Many Taxpayers Are Facing Issues with AIS: Know the Reasons and How to Fix Them:

Why Many Taxpayers Are Facing Issues with AIS: Know the Reasons and How to Fix Them The Income Tax Department has introduced the Annual Information Statement (AIS) to help people see all their financial transactions in one place. It collects information from banks, stock exchanges, property offices, and other sources. Although it is supposed to make tax filing easier, many people are actually finding errors in their AIS, which can create confusion and may create complications with the tax department.

What is AIS?

AIS is a report that shows all your financial transactions for a financial year. It consists of things like

• Salary income
• Interest from savings and fixed deposits
• Dividends
• Buying and selling of shares and mutual funds
• Property transactions
• Foreign money transfers

The data in AIS is collected from various sources like banks, depositories, mutual fund companies, and property registrars. Taxpayers are expected to check this data and report any mistakes.

Common Problems People Are Facing

Capital Gains Mismatch When you sell shares or mutual funds, the AIS may show a different price than what you actually got. This happens because sometimes the system takes the stock’s closing price instead of the real sale price. For example, if you sell a share for Rs 100, but the AIS shows Rs 101 (based on the closing price), even if it is only a Rs 1 difference, it may look small but can still cause problems during assessment. Real Estate Mismatch When a property is purchased jointly, such as by a husband and wife, the full value of the property is often recorded on both PAN numbers as well. This means that even if someone has really only paid for it, both parties are often double-counting the received entries. Example: A flat worth Rs 1 crore is registered in both the husband’s and wife’s names, but only the husband paid for it. AIS shows Rs 1 crore under each PAN, making it look like an Rs 2 crore purchase. This can lead to unnecessary tax issues. FD Interest Errors Fixed deposits earn interest every year. Normally, this interest is taxed every year when it is earned. But AIS may show the full amount of interest again in the year the FD matures, leading to duplication. Example: A fixed deposit of Rs 5 lakh gives Rs 35,000 interest per year at 7%. Over 5 years, Rs 1.75 lakh is already taxed yearly. But AIS may again show Rs 1.75 lakh in the fifth year, making it look like extra income.

What Can You Do if There’s a Mistake?

If you find any errors in your AIS, you can submit feedback online. Here's how you can do it:

• Step 1: Go to incometax.gov.in
• Step 2: Log in to your account
• Step 3: Click on ‘Compliance Portal’ under the Pending Actions section
• Step 4: Click ‘Proceed’ and open the AIS section
• Step 5: Select the financial year
• Step 6: Click ‘View AIS.’
• Step 7: Pick the transaction where there is a mistake
• Step 8: Click ‘Optional’ under ‘Provide Feedback.’
• Step 9: Submit your correction and save the reference ID

This feedback helps the tax department update your records.

Important Things to Keep in Mind

Here are a few important things to keep in mind:

• Always compare AIS with Form 26AS and TIS before filing your tax return.
• Report any mistakes as soon as possible on the portal.
• Keep proof like bank statements, FD certificates, or sale deeds to support your claim.
• Don’t delay filing your return just because of AIS errors; you can still file and explain it later.
• Be ready to explain any differences if asked by the tax department.

What Experts Suggest to the Tax Department

Experts have also suggested some improvements to make AIS better:

• Allow better feedback options for cases like gifted property or jointly owned property
• Ask banks, depositories, and registrars to send more accurate data
• Issue circulars that tell taxpayers about known system issues so they don’t panic