Filing your Income Tax Return (ITR) accurately is crucial, and it involves incorporating vital information from your Annual Information Statement (AIS). However, discrepancies or missing data in the AIS can occur, leading to confusion during the filing process. Here's what you should do to address such situations:
1. Verify Sources of Income
Don't assume that the absence of income in the AIS means there is no income from that source. Cross-check all your income sources with the AIS, and if any earnings are not reflected, obtain the necessary information from the respective financial institutions. Ensure to mention this additional income in your ITR.
2. Resolve Discrepancies
In cases where the AIS and the bank's interest certificate show different amounts of interest income, rely on the bank's certificate for accuracy. This helps avoid any potential income tax notices.
3. Correct Errors in AIS
If the AIS displays higher income than what was actually earned, promptly correct the error to prevent any complications. The AIS should ideally reflect the information shared by various financial institutions with the income tax department.
4. Provide Feedback for Correction
If you find discrepancies between your AIS and the financial institution's statement, inform the concerned institution to rectify the error. Subsequently, file your ITR based on the corrected information.
5. Inform the Bank about Errors
If you suspect the bank has made an error resulting in discrepancies in your AIS, notify the bank to obtain the correct income amount.
6. File Revised ITR if Necessary
If you realize that you had inaccurately reported your interest income, and the AIS was correct, file a revised ITR promptly to avoid any potential income tax notices.
How AIS Information is Populated
The AIS gathers information from financial entities like banks, mutual fund houses, and companies based on details shared by them. If an entry appears in your AIS but the corresponding counter entry is missing in your financial statement from the institution, it is your responsibility to report the correct figures to the income tax department.
For instance, if your AIS shows savings account interest of Rs. 2,000, but your bank's statement shows only Rs. 200 as total interest paid to you for a specific financial year, you must inform the income tax department about this discrepancy and get your AIS corrected. Additionally, check with the bank to ascertain if there is any error from their side on the bank statement.
Remember, the purpose of the AIS is to help taxpayers reconcile the information available to them. Hence, if you possess adequate documentation supporting a financial transaction mentioned in the AIS, you can rely on it and provide feedback to correct any inaccuracies.
By following these steps and ensuring the accuracy of your AIS, you can confidently file your ITR and avoid potential tax-related issues.
The author is a Chartered Accountant with 2 decades of experience into Accounting, Taxation, Auditing, Risk & Compliance, Credit Controls, Due diligence. Currently, the author is the founder and managing partner at RRL Global services.
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