How to fix AIS inaccuracies while filing your tax returns

Taxpayers should compare AIS with their records and Form 26AS, raise disputes via AIS portal, and retain proof for scrutiny

- Anil Poste

The annual information statement (AIS), introduced by the Income Tax Department to enhance transparency, is instead creating hassles for many taxpayers by reporting incorrect incomes, according to most chartered accountants.

Introduced in 2021, the AIS provides a snapshot of an individual's financial transactions—ranging from securities and mutual funds to property deals and fixed deposits—during a fiscal year. The data is typically sourced from multiple reporting entities such as banks, registrars, depositories, and sub-registrars. Available on the Income Tax e-Filing portal, the AIS complements Form 26AS by offering an expanded view of various income streams and financial transactions that could have tax implications.

However, the AIS is often riddled with inaccuracies, which can leave taxpayers confused or exposed to unnecessary notices and scrutiny during assessments.

One of the most common errors in the AIS relates to capital market transactions, particularly equity trading. While brokers and depositories are required to report trade details, discrepancies often arise when the reported prices or values do not align with the actual trade data.

"We've come across several critical mismatches in tax reporting that can create significant challenges for taxpayers. In equity transactions, for instance, depositories often report closing prices that differ slightly from the actual transaction prices," said Ashish Karundia, chartered accountant and founder, Ashish Karundia & Co.

These discrepancies often arise from systems failing to capture real-time prices or settlement-specific data.