The Annual Information Statement (AIS) is a compiled statement that has details of all the financial transactions carried out by you in a financial year. The various financial institutes report the details of all your financial transactions done in a financial year to the income tax department. These transactions include details of income earned by you such as rent, interest, dividends, professional salary, etc., sale and purchase of any mutual funds, stocks, equity shares, bonds, etc., and also, transactions with the bank like payment of credit card dues, cash deposits, fixed deposits, drafts purchased, etc.
So, AIS is an extension of the formerly available Form Number 26AS. This form consisted of information regarding the tax deducted and tax deposited during a financial year, along with a summary of Specified Financial Transactions or SFT. It also gave information about the income tax refunds and interest granted to you on such a refund.
The government has introduced AIS so that the taxpayers can get a compiled view of all the financial information that is known to the income tax department and can accordingly proceed to file their taxes. Since all the information will be displayed in one place, it will be easy for the taxpayers to file their tax returns and other forms.
Aside from this, one more factor is added in AIS, which is accepting feedback from the taxpayers about their financial information available on the portal. Through this feature, if a taxpayer finds any transaction which is present in the AIS but is not done by them, they can report it online. This is called customer feedback in AIS. After the filing of the report, the AIS gets modified. It retains the information that it previously had, along with the report that the taxpayer files. After this, the amendments are made according to the feedback given by the taxpayer. And then, the Tax Information Statement (TIS) shows the edited information.
The income tax department initiated ‘Project Insight’ to focus on three goals, namely-
- To promote voluntary compliance and deter non-compliance,
- To impart confidence that all eligible people pay the appropriate tax,
- To promote fair and judicious tax administration.
Uploading of AIS to your account is part of this ‘Project Insight’.
The AIS is available from the financial year 2020-21 on the income tax portal. The last date to file the income tax return is 31st December 2021. So make sure you file your income tax return before the last date to ensure no problems along the way.
Some of the features of the Annual Information System (AIS) are as given below:
- Incorporation of new information- AIS will now incorporate new information in addition to the information previously found in Form 26AS. Apart from the information already included in Form 26AS, the AIS will also have information about the interest, mutual funds transactions, dividends, rent, etc.
- Data Analytics- AIS uses data analytics to include PAN to non-PAN data so that tax can be levied accordingly. For example, it asks the vendors like Amazon and Flipkart to report any transactions above the threshold limit, and then with the help of the address and name of the buyer, they can add such transactions to your PAN and include them in your AIS.
- Avoiding duplication of information- AIS is programmed so that it does not allow duplication of information so that a simple Tax Information Summary (TIS) is generated, which eases the process of return filing.
- Inclusion of feedback- AIS allows the taxpayer to submit online feedback regarding the transactions displayed on the AIS portal. This allows the taxpayer to report any transactions that they have not made.
Elements of Annual Information System (AIS):
The question that arises is what are the basic elements of AIS. So to answer that, the AIS has 2 elements or components or parts in which the information is displayed:
Part A- GENERAL INFORMATION
This part of the AIS contains general information about the taxpayer, such as their name, date of birth, PAN number, masked aadhar number, mobile number, email address, and residence address.
Part B- TAX INFORMATION STATEMENT (TIS)
TDS/TCS information- This includes information regarding the tax deducted (TDS) and the tax collected (TCS) at the source about the taxpayer. This information is also displayed in Form 26AS.
- Statement of Financial Transaction (SFT) Information- Under this tab, information regarding various financial transactions throughout the financial year is displayed, such as information of interests, dividends, purchase and sale of immovable property, etc.
- Payment of Taxes- This displays information about the different taxes paid by the taxpayer. For example, advance tax, self-assessment tax, etc., it also displays the date of the payment made and the challan number through which the payment was made to the bank.
- Demand and Refund- This tab will give information about any demands raised during the assessment year and the refunds that may be initiated during the assessment year. It will give information about the nature of the refund and the amount that was refunded. However, this facility has not been started yet; this feature will soon be made available.
- Other Information- Under this tab, you can see the information collected from other sources, such as details of annexure 2 of salary, interest on tax refund, etc.
The next question that arises is how a taxpayer can access the Annual Information Statement. So, the steps to access AIS are as follows:
1. Login to the income tax portal, www.incometax.gov.in, using the login credentials. The login id is generally the PAN number of the taxpayer.
2. After logging in, you will find the 'services' tab. Click on that and select 'Annual Information Statement (AIS)'. A pop-up will appear on your screen; click on 'proceed'. This will redirect you to the new AIS portal.
3. On the new web page that opens, click on ‘AIS’.
4. Here two options will appear- TIS or AIS. Then click on the download arrow on the AIS box.
A pop-up will then appear asking you to select the format in which you want to download the AIS. It can be downloaded in a pdf format, which is password protected. The password is usually a combination of your PAN and your date of birth in DDMMYYYY format. After you type in the password, you can access your AIS.
The feedback options available on the AIS portal for the taxpayer are as described below:
- Information is correct- the information belongs to the taxpayer, and all the information displayed is correct.
- Information is not fully correct- the information belongs to the taxpayer but not all the information that is displayed is correct. Through this option, the taxpayer needs to update the correct information details on the portal.
- Information relates to another PAN/year- the information is known to the taxpayer. Still, it belongs to another PAN in joint ownership of property or receiving of the amount mentioned in another year.
- Information is duplicate/already mentioned in another information- the information displayed is already included under some other information or is duplicate.
- Information is denied- If the taxpayer completely denies the information displayed on the portal.
- Customized Feedback- The feedback will be made available according to the information category.
Suppose the taxpayer provides no feedback in the stipulated time. In that case, it will be assumed that the information displayed is correct. The income tax department may ask you to explain the mismatch between the income tax return filed by you and the information displayed in the AIS.
Advantages of introducing Annual Information Statement (AIS):
- The AIS is introduced to check on tax evasion. It will use Artificial Intelligence (AI) to detect cases of tax evasion. In this way, tax fraud will be controlled.
- This will improve the accuracy of income tax returns filed by the taxpayers.
- It will make it easier for the taxpayers to file their tax reports, as all the information will now be available in one place.
- It will enable the taxpayers to view and report any wrong information that may be included under their PAN.
Feature of Chat Box on AIS portal:
A chatbox is also made available on the AIS portal. Artificial intelligence (AI) aided software will allow the users to start a conversation in their natural language. The user can post their query in the chatbox and can get instant replies based on the frequently asked questions and machine learning.
Objectives of AIS:
- Display complete information that is available with the income tax department to the taxpayers.
- Capture online feedback from the taxpayers.
- Promote voluntary compliance and enable pre-filling of the tax return.
- Deter non-compliance.
Difference between Form 26AS and Annual Information Statement (AIS):
- Form 26AS is an old form that is available for filing tax returns. While the AIS was introduced recently in the financial year 2020-21.
- TDS, TCS, Tax Paid other than TDS and TCS, details of paid refund, details of SFT informed by the reporting entities, details of GSTR-3B were displayed in Form 26AS. In the AIS, information regarding salary, dividends, rent received, interest from the savings bank, interest from deposit, sale, purchase of listed securities, and mutual funds are displayed.
In Conclusion, this digital journey by the tax department puts a higher responsibility on the taxpayers to ensure that they review this information regularly and report the correct income/tax details in their tax returns to avoid notices and inquiries from the tax department.