What is Annual Information Statement (AIS)?

AIS is a document prepared to help taxpayers with the provision of a consolidated financial summary. The AIS full form is an annual information statement issued by the Income Tax Department to allow all taxpayers to track and monitor their transactions for easy filing and reporting requirements.

It was launched by the Income Tax Department in 2021 and consists of crucial financial information on specific tax-related data, expenses, and revenue of individual taxpayers. It is important to know what AIS is in income tax and how it benefits taxpayers.

The key purpose of AIS in income tax is to provide detailed information about tax payments, other than TDS, which helps while filing income tax returns. An upgrade of Form 26AS is AIS, with deeper insights into different financial and tax-related transactions, as Form 26AS statement in income tax only covered specific details relating to TDS.

To understand the comprehensive details available on an annual information statement, let us break down the key components of AIS below.

Income Details

All different sources of income are covered in an AIS. The list of sources can include capital gains, rental revenue, interest earned, salary payments, etc. This information is crucial for filing ITR with accurate data.

Expenses and Investments

Throughout a financial year, all the transactions relating to major purchases like stocks, property, mutual funds, etc., are all recorded in an AIS. Moreover, it defines the expenses into categories based on tax applicability to update taxpayers with clear knowledge of eligibility for various tax benefits.

TDS

Tax Deducted at Source, or TDS is a mandate by the government. An AIS includes all TDS deductions of various entities, like banks or financial institutions, employees, vendors, etc., to help taxpayers claim tax benefits as per limits and eligibility.

Banking Transactions

Most individuals and businesses rely on net banking or bank transactions to make high-value payments. Payments like withdrawals and deposits are also crucial information and are thus recorded in an AIS to track banking transactions easily.

Account Statements of All Bank Accounts

Businesses and individuals own several bank accounts and invest in various financial products. All information related to each of the bank accounts and investments is recorded in an AIS.

This can consist of savings accounts, salary accounts, 0 balance accounts, fixed or recurring deposits, etc.

There are many important benefits of an annual information statement for taxpayers. Due to its detailed overview of various financial transactions, it allows a better understanding of one’s financial well-being. Some of the top benefits include:

With an annual information statement, everyone is well updated about their financial transactions, making it easier for taxpayers to take complete accountability for their finances, encouraging complete transparency.

Filing tax returns on time is extremely important to avoid financial penalties. To help with income tax, AIS simplifies the filing process by providing the correct information on all payments and expenses. This further reduces the scope of errors significantly.

Income reporting becomes easier with an annual information statement, as all financial activities are recorded for reference.

Complying with the tax rules and regulations is crucial. Moreover, with a clear understanding of all the financial transactions, claiming the right deductions and tax benefits is easier with an AIS.

To check your annual information statement, you need to go to the official website of the Income Tax Department. Here is how you can do it.

Use your e-filing account credentials to log in on the official website.

Go to the section labelled “My Account.”

Choose the “Services” drop-down

Click on “Annual Information Statement” from the bottom.

Enter the financial year you want the AIS for.

Click “Proceed”

Now, you can view the AIS. You can also download the AIS statement for reference.

Financial well-being is very important today, and so it is important to keep a check on your transactions. The best way to do so is by an annual information statement. No matter the nature and category of finances, they are all covered in an AIS.

It promotes increased accountability and transparency for the taxpayers, making it easier to comply with the taxation authorities. Moreover, they get more freedom and support to manage finances.

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How many parts are there in an AIS?

The annual information statement consists of two parts. The first part entails the taxpayer's details, including name, PAN, contact number, and Aadhar card details. The second part consists of all the financial and tax information like refunds, demands, etc.

Do I need to look into Form 26AS if I have viewed my AIS?

Yes, it is recommended to refer to both AIS and Form 26AS before filing income tax returns to avoid any gap or inaccurate information inputs.

I think some information on my AIS is incorrect. How can I resolve this?

If you spot an error in your AIS, you can easily rectify it by sending a feedback form to the Income Tax Department online. For this, you need to log into the e-filing portal and, under my account, go to the AIS statement, choose the financial year with errors and add your feedback.