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Thursday, December 02, 2021

Explained: How to file your I-T returns using the new Annual Information System

The revised AIS includes additional categories of information - on interest, dividend, securities transactions, mutual fund transactions, and remittances from abroad, along with information on many other transactions that are at present available with the Income-Tax Department.

Written by Aanchal Magazine |
Updated: November 6, 2021 7:31:04 am
Form 26AS will continue to exist until the new AIS is validated and is completely operational, the Tax Department said. (Representational Image)

The Income-Tax Department has rolled out a new Annual Information Statement (AIS), which includes additional categories of information. With this, the Department is expanding the list of high-value transactions covered so far under Form 26AS — which will remain in use until the new AIS becomes completely operational.

What is the AIS, and how will it help?

At present, Form 26AS is detailed by the Tax Department, which is a consolidated annual tax statement that includes information on tax deducted/collected at source, advance tax, and self-assessment. It is available on the Income-Tax website against a taxpayer’s Permanent Account Number (PAN). The 2020-21 Budget had announced the revised Form 26AS, giving a more comprehensive profile of the taxpayer, going beyond the details of tax collected and deducted at source.

The revised AIS includes additional categories of information – on interest, dividend, securities transactions, mutual fund transactions, and remittances from abroad, along with information on many other transactions that are at present available with the Income-Tax Department. “There may be other transactions relating to the taxpayer which are not presently displayed in the AIS,” the I-T Department has said.

Will Form 26A cease to exist now?

Form 26AS will continue to exist on the TRACES portal until the new AIS is validated and is completely operational, the Department said. In May last year, the Department had notified the new AIS in Form 26AS, effective from June 1, 2020. The revised Form 26AS included all details provided by banks and financial institutions, which were earlier recorded in their Statement of Financial Transactions (SFTs).

On October 26, the Central Board of Direct Taxes (CBDT) issued an order under Section 285BB of the Income-tax Act to expand the scope of reportable transactions under Form 26AS. The additional categories include foreign remittance made by any person through an authorised dealer, breakup of salary with deductions claimed by the employee, information in income tax returns of other taxpayers, interest on income tax refund, information published in SFTs along with off-market transactions reported by the depository/ registrar and transfer agent (RTA), and information about dividend and purchases of mutual fund reported by the RTA.

What do taxpayers have to do now?

The new AIS can be accessed by clicking on ‘Annual Information Statement (AIS)’ under the ‘Services’ tab on the new Income tax e-filing portal (incometax.gov.in).

If the taxpayer feels that the information is incorrect, relates to another person/year, is a duplicate etc, a facility has been provided to submit feedback online. Feedback can also be furnished by submitting multiple information in bulk. An AIS Utility has also been provided for taxpayers to view their AIS and upload their feedback offline.

The reported value and value after feedback will be shown separately in the AIS. In case the information is modified/denied, the source of the information may be contacted for confirmation.

Do taxpayers have any cause for worry?

Taxpayers just need to carefully check all transactions reflected in the AIS, so that correct information is then reflected in their returns. With the revised AIS, most transactions are now under the purview of the I-T Department. The Department has said it also has access to information beyond what is being shown in the AIS, which will help tax authorities to assess a taxpayer’s profile comprehensively and reduce the scope of evasion. The department has offered the convenience of feedback, which will ensure correction of any anomaly before a taxpayer files their returns. The ability to submit online feedback will help remove any duplicate and incorrect transactions.

A simplified Taxpayer Information Summary (TIS) has also been generated for each taxpayer, which shows the aggregated value for the taxpayer for ease of filing returns.

If the taxpayer submits feedback on AIS, the derived information in TIS will be automatically updated in real time, and that information will be used for pre-filing of returns. Pre-filling will be enabled in a phased manner. Taxpayers have been asked to check all related information, and to report complete and accurate information in their income-tax returns.

When is it applicable from? What about those who have already filed their returns?

Taxpayers need to view the information shown in the AIS and provide feedback if the information needs modification for returns to be filed this year. The value shown in the TIS has to be considered while filing the ITR. If the ITR has already been filed and some information has not been included, the return may be revised to reflect the correct information, the I-T Department said.

If there is a variation between the TDS/TCS information or the details of tax paid as shown in Form 26AS on the TRACES portal, and the TDS/TCS information or the information relating to tax payment as displayed in AIS on the compliance portal, the taxpayer should rely on the information displayed on the TRACES portal for filing their ITR and for other tax compliance purposes, the Department said.

 

 

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