ITR Filing 2023: Choosing between AIS and Form 26AS for Filing Your ITR: A Comparative Analysis

When taxpayers file their income tax returns (ITR) in 2023, they might encounter a dilemma regarding whether to consult the Annual Information Statement (AIS) or Form 26AS. 

The AIS offers a comprehensive overview of a taxpayer's information, encompassing details on TDS/TCS, interest, dividends, stock market transactions, and mutual funds. In contrast, Form 26AS serves as a consolidated credit statement specifically highlighting direct taxes that have already been paid. 

While AIS provides a more extensive view of income from various sources, Form 26AS focuses solely on TDS and TCS information. It is advisable to refer to both AIS and Form 26AS during ITR filing since they serve distinct purposes. 

Nonetheless, it is crucial to be aware that errors can occur in both documents. Taxpayers should keep relevant documentation and provide feedback to rectify any mistakes found in the AIS. 

When filing their income tax return (ITR), taxpayers may wonder whether they should consult Form 26AS or the Annual Information Statement (AIS). 

Prior to the introduction of AIS, individuals were advised to review Form 26AS to ensure that all taxes deducted during the financial year were accurately recorded by the Income Tax Department, according to a report by the Economic Times.

What is AIS?

AIS stands for Annual Information Statement. It provides a comprehensive summary of a taxpayer's information, which is also included in Form 26AS. Along with TDS/TCS details, AIS displays information about interest, dividends, stock market transactions, mutual fund transactions, and more.

What is Form 26AS?

Form 26AS is a consolidated credit statement that encompasses information on the direct taxes paid by an individual to the government. Every taxpayer can access their Form 26AS through the official website of the Income Tax Department by using their Permanent Account Number (PAN).

AIS vs Form 26AS: Income Tax Filing 2023

The Annual Information Statement (AIS) was introduced by the income tax department in November 2021 and offers a more comprehensive overview compared to Form 26AS. In addition to tax details, the AIS also includes information about income from various sources (such as salary, interest income, dividends, and capital gains) received by the taxpayer during the financial year, as reported by the Economic Times.

During the launch of AIS, the income tax department stated in a press release that if there is any discrepancy between the TDS/TCS information or tax payment details displayed in Form 26AS on the TRACES portal and the information displayed in the AIS on the Compliance Portal, the taxpayer can rely on the information shown on the TRACES portal for filing their income tax return and other tax compliance purposes.

Which Should You Choose While Filing ITR Form 26As or AIS?

According to an ITR filing website, it is advisable for individuals to refer to both the Annual Information Statement (AIS) and Form 26AS when filing their income tax returns. 

The income tax department has specified that Form 26AS will now display only TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) information. 

Any other tax payments made, such as self-assessment tax or advance tax, will be reflected in the AIS. Therefore, both documents hold significance in the process of filing ITR.

A business consulting firm emphasizes the equal importance of both AIS and Form 26AS for taxpayers while submitting their income tax returns. 

In general, the information presented in Form 26AS is expected to align with the AIS since the source of this information, such as Statement of Financial Transactions (SFT) and TDS returns from tax deductors, remains mostly the same. 

However, it has been observed that AIS occasionally duplicates certain details, like TDS from salary or mutual fund dividends.
 

What to do in case of errors in both AIS and Form 26AS?

There is a possibility of errors occurring in both the Annual Information Statement (AIS) and Form 26AS. In such cases, it is recommended that taxpayers maintain relevant documentation, including bank statements, passbooks, Demat statements, and transaction agreements such as purchase or sale deeds, for the transactions conducted during the respective financial year. 

If the taxpayer possesses sufficient documentation that supports the financial transactions mentioned in the AIS, they can rely on that documentation and provide feedback to rectify any errors in the AIS.

If errors are found in Form 26AS, the taxpayer should bring them to the attention of the tax deductor and request a revision of the TDS return to correct the mistake. 

If the tax deductor refuses or is unable to rectify the errors, it is important for the taxpayer to keep relevant documents readily available in case the income tax department requests proof to resolve the issue.

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