A Comprehensive Guide on AIS and TIS in Income Tax

For many people, filing their income taxes is a rather difficult task. To file an accurate and compliant return and avert any prospective lawsuits, it is essential to comprehend various income tax documents and their significance (Income Tax Litigation). The Annual Information System (AIS), Taxpayer Information Summary (TIS), and Form 26AS are the three main components that control the process. They will be clearly explained in the following sections, explaining how they fit into efficient income tax return preparation and filing. Read on to get a comprehensive overview of both AIS and TIS.

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Table of content

What is the Annual Information Statement (AIS)?

Role of AIS in Income Tax Filing

Objectives of AIS

Salient Features of AIS

What is a Taxpayer Information System (TIS)?

Accessing AIS and TIS

Why is AIS and TIS Important for Taxpayers?

Differences Between AIS and TIS

What is the AIS PDF Password and How to Open It?

How to Submit Feedback in AIS and Rectify Errors?

AIS Correction Status Update

Conclusion

Most Asked Questions

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What is the Annual Information Statement (AIS)?

The Income Tax Department in India introduced the Annual Information System (AIS), a potent instrument for gathering data on a taxpayer's financial transactions. An individual taxpayer receives income from a variety of sources during a financial year, including wages, rent, interest income, and so forth. The AIS is responsible for compiling information about these different sources of income, taxes deducted at source (TDS), taxpayer-paid taxes, and other pertinent tax-related data. AIS acts as an important link between taxpayers and the Income Tax Department. It offers a consolidated picture of tax credits, tax liabilities, and other pertinent tax-related data to taxpayers. Form 26AS is the document that presents this comprehensive view.

AIS also shows the income from interest, dividend, stock market, mutual fund transactions and so on. In case of discrepancies, the taxpayers can share their feedback on the transactions reflected by the AIS. 

AIS provides two types of values for each piece of information—reported value, which is what the reporting entities have submitted, and modified value, which reflects any adjustments made based on taxpayer feedback. This applies to various types of information, including TDS (Tax Deducted at Source) and Statements of Financial Transactions (SFT), among others.

Illustration: Take Mr. X, a taxpayer, as an example. Mr. X takes money out of several sources, including his salary, rental income, and interest. The relevant parties, such as the employer, bank, or tenant, withhold the necessary tax at source from Mr. X as he receives these sources of income. Mr. X also pays self-assessment taxes and advance taxes on top of this. The AIS compiles and organises all of this vital tax-related data into a comprehensive document called Form 26AS.

Role of AIS in Income Tax Filing

Form 26AS and the Annual Information System (AIS) are important components of the income tax return filing procedure. Taxpayers can get a clear and complete view of their tax credits and liabilities by using Form 26AS to access the AIS. This enables them to locate any inconsistencies or missing information by comparing the data in their own records with Form 26AS. Accurate reporting of income and taxes is ensured and taxpayers can avoid potential problems with the tax authorities by fixing any errors or omissions before completing the ITRs.

Objectives of AIS

• Provide comprehensive information to taxpayers and encourage them to submit feedback online.

• Promote voluntary compliance and minimize instances of income underreporting.

• Streamline the pre-filling of tax returns by ensuring data accuracy.

• Simplify the tax filing process for taxpayers by offering consolidated information.

• Act as a deterrent against non-compliance by making taxpayers aware of reported income and transactions.

Salient Features of AIS

• AIS includes additional details such as interest income, dividends, securities transactions, mutual fund transactions, and foreign remittances.

  
  

• To ease the tax return filing process, a summary of this information is provided in the form of the Taxpayer Information Summary (TIS).

  
  

• Taxpayers can submit feedback online if discrepancies are found and download the AIS in PDF or CSV formats for their reference.

  
  

• The AIS utility allows taxpayers to view the statement and upload feedback offline through a downloadable tool.

What is a Taxpayer Information System (TIS)?

Apart from becoming familiar with Form 26AS and the Annual Information System (AIS), taxpayers also need to learn about the Taxpayer Information Summary (TIS). A consolidated summary of all the tax-related data that taxpayers need, such as filed tax forms, taxes paid, refunds obtained, and other pertinent information, is given to them in the form of a TIS statement. A statement that compiles all of the tax data that is on file with the Income Tax Department for a particular taxpayer is called the Taxpayer Information Summary (TIS). It offers important insights into the taxpayer's tax compliance and acts as a summary of their tax-related activities. 

Information including the number of tax returns the taxpayer submitted, the taxes paid, the refunds received, and any unpaid tax liabilities are all included in the TIS statement. Reviewing and comparing their own tax records with the data kept by the Income Tax Department is facilitated by this helpful tool for taxpayers.

Role of TIS in Income Tax Filing

The procedure of filing an income tax return (ITR) heavily relies on the Taxpayer Information Summary (TIS). Taxpayers can confirm the accuracy of their tax-related information and make sure it matches the data kept by the Income Tax Department by looking over their TIS statement. It also aids taxpayers in balancing the data held by the Income Tax Department with their own tax records. It offers a chance to find any inaccurate or missing information that should be fixed before submitting the ITR. 

Taxpayers can protect themselves from fines and investigations by taking a proactive stance. Additionally, the TIS statement is a trustworthy source of data for tax assessments and audits. It acts as proof of the taxpayer's tax-related activity and offers a condensed summary of their tax compliance. Through consistent observation of the TIS declaration, taxpayers can uphold responsibility and openness in their tax matters.

Accessing AIS and TIS

To maintain accuracy in their tax filings and to be informed about their tax obligations, taxpayers must have access to the Annual Information System (AIS) and Taxpayer Information Summary (TIS). The Income Tax Department makes available to taxpayers a convenient online platform for accessing their AIS and TIS statements. 

Taxpayers can view their AIS and TIS statements online via the e-filing system maintained by the Income Tax Department. They can access and download their AIS and TIS statements whenever it's convenient for them by logging into their e-filing accounts. Furthermore, they can keep track of their tax-related activities by routinely reviewing their AIS and TIS statements. It offers a chance to confirm the information's accuracy and reconcile it with their own records.

Why is AIS and TIS Important for Taxpayers?

For both individuals and corporations, the Annual Information System (AIS) and Taxpayer Information Summary (TIS) are important tools in the tax compliance process. Let us explain how:

• Through Form 26AS, taxpayers can access the AIS and obtain a consolidated view of their tax credits and liabilities. This enables them to keep track of the money coming in from different sources, keep an eye on taxes deducted at the source, and make sure taxes are paid on time. With the ability to monitor a wide range of tax-related data, taxpayers may manage their taxes more effectively, maximise their tax savings, and stay away from fines for non-compliance. 

  
  

• Taxpayers can ensure the correctness of their tax information by routinely checking their TIS statements. They can find any inconsistencies or missing information that may need to be resolved by comparing the information in the TIS statement with their own records. Taxpayers can ensure proper reporting of all relevant income, taxes paid, and refunds received by using the TIS statement to reconcile their tax records. 

  
  

• Transparency and accountability in the tax system are provided by the AIS and TIS statements. When conducting tax assessments or audits, the AIS and TIS statements are useful resources. They give tax authorities a thorough record of the taxpayer's financial transactions and tax obligations, enabling them to evaluate the completeness and quality of the data included in the income tax forms.

Differences Between AIS and TIS

While providing crucial tax-related information, AIS and TIS have different functions. Listed below are the differences you should know about:

• Type of Information: AIS offers details on all of your financial transactions made during the fiscal year, including investments, real estate purchases and sales, etc. However, information about your income tax returns, demand, and refund status is contained in TIS.

  
  

• Objective: The main goal of AIS is to help taxpayers ensure correct income tax return filing by helping them cross-verify their investments and income with the information that is on file with the tax department. The purpose of TIS is to provide taxpayers with a summary of their tax payments, filed returns, and the status of their refunds. 

What is the AIS PDF Password and How to Open It?

When you download the AIS (Annual Information Statement) in PDF format, it will be password-protected. To unlock the PDF, use your PAN (in lowercase) combined with your date of birth (for individual taxpayers) or the date of incorporation/formation (for non-individual taxpayers) in the format DDMMYYYY, without any spaces.

For example, if your PAN is AAAAA5678S and your date of birth is 22nd June 1997, the AIS password would be: aaaaa567822061997

How to Submit Feedback in AIS and Rectify Errors?

Taxpayers can submit feedback either online or offline. For online submissions, feedback can only be provided through the AIS section on the Compliance Portal. Here’s a step-by-step guide on how to submit feedback and rectify errors in your AIS:

1. Log in to the Compliance Portal and navigate to the Annual Information Statement (AIS) tab.

   
   

2. You will see various sections such as TDS/TCS information, SFT information, payment of taxes, demand and refund details, etc.

   
   

3. To provide feedback, select the relevant information category and click on the Submit Feedback option.

   
   

4. Choose the appropriate feedback type from the available options.

   
   

5. Once feedback is submitted, the modified values will appear in a bracket-style format in the respective section.

   
   

6. The modified values will automatically update the Taxpayer Information Summary (TIS), which will, in turn, be used to populate the taxpayer’s ITR form.

   
   

AIS Correction Status Update

As of May 13, 2024, the Central Board of Direct Taxes (CBDT) introduced a new feature that displays the status of any corrections or feedback submitted in the AIS. This feature indicates whether the feedback or correction has been fully accepted, partially accepted, or rejected by the Reporting Source (the entity responsible for providing the information in the AIS).

Here are the options displayed for feedback confirmation status:

Whether feedback is shared for confirmation: Indicates if your feedback has been sent to the Reporting Source for verification.

• Feedback Shared On: Shows the date your feedback was sent to the Reporting Source.

• Source Response: Provides the response from the Reporting Source, indicating whether corrections are required based on your feedback.

• Source Responded On: Displays the date the Reporting Source responded to the feedback.

This new feature enhances transparency by allowing taxpayers to track the status of their feedback or corrections directly within the AIS. It is part of the Income Tax Department’s ongoing efforts to simplify tax compliance and improve services for taxpayers.

Conclusion

For efficient tax planning and compliance, it is essential to comprehend the Annual Information Statement (AIS) and the Taxpayer Information Statement (TIS). Taxpayers can get a consolidated view of their financial activities and tax status with these documents, which are accessible through the income tax portal. But deciphering these elements can be tricky, so consulting tax experts or personal finance guidance services can be helpful. Seek out professionals who can help you understand these statements, make sure your income tax return is filed accurately, and help you with effective tax planning.

FAQ

Q1. What is the meaning of AIS and TIS?

Both individual taxpayers and corporations must comply with tax laws, and the Annual Information System (AIS) and Taxpayer Information Summary (TIS) are important tools in this process. These systems give taxpayers detailed information about all of their financial transactions, including the taxes that were paid, withheld at the source, and reimbursed.

Q2. Which is more reliable, 26AS or AIS?

AIS supports taxpayers in making sure tax regulations are followed and appropriate reporting is made. Because it contains more information about capital gains, savings bank interest, interest on deposits, foreign remittances, and share transactions, AIS is more comprehensive than Form 26AS.

Q3. How to use AIS and TIS? 

When submitting your income tax return, you can utilise AIS as a reference document to balance your investments and income. By doing this, inconsistencies and tax department notices may be avoided. You may monitor the status of your tax payments, demands, and refunds using TIS. By visiting TIS frequently, you can stay informed about any upcoming tax obligations or refunds. 

Q4. What is the importance of regular monitoring of AIS and TIS?

To make sure that the tax-related data is correct and current, it is imperative to regularly examine the AIS and TIS statements. Taxpayers can find any inconsistencies, omissions, or mistakes that may need to be fixed by examining these declarations. Taxpayers can preserve transparency in their tax dealings and guarantee compliance with tax regulations by keeping an eye on the AIS and TIS statements. It enables them to keep tabs on their tax liabilities, comprehend the effects of deductions and exemptions, and, if needed, modify their tax planning. 

Q5. Which form should a taxpayer refer to while filing an ITR?

The taxpayer may rely on the information shown in Form 26AS for return filing if there is a discrepancy between the TDS or TCS information or the details of tax paid as provided in Form 26AS vs. AIS. You can, however, amend your income tax return based on the data shown in AIS if you have already submitted it and have discovered new information in AIS. 

Q6. What is the password for AIS and TIS?

The same password will work on any device to access income tax notices, and AIS and TIS are no exception. As stated on your PAN card in the format DDMMYYYY, you must insert your date of birth after your PAN number in lowercase.

Q7. What is the difference between AIS and TIS?

The Annual Information System offers comprehensive data about a taxpayer's financial activities over a fiscal year. It contains information about TDS/TCS, stock market and mutual fund transactions, among many other things. A taxpayer's income tax returns, demand, and refund status during a financial year are all included in the Taxpayer's Information Summary (TIS). When submitting income tax returns, AIS assists with the reconciliation of investments and income for the fiscal year. Tracking the tax or refund that may be owed is made easier by routinely checking TIS.

Q8. Can I track the activity History in AIS?

Yes, you can track your activity history in the AIS. You’ll receive a summary view of all the actions taken within the AIS, including an activity ID for each task, the date, a description, and additional details displayed under this tab.

Q9. What will happen once I submit the feedback?

Once you successfully submit feedback on AIS information, your feedback will be displayed alongside the information, and the modified value will be shown next to the reported value. The activity history tab will also be updated, allowing you to download the Acknowledgment Receipt. You'll receive email and SMS confirmations for your feedback submission.

If a discrepancy is reported, the original information provider—such as a bank or SEBI—will be asked to re-validate the transactions and report the correct values again.

Q10. Would I get any confirmation on the submission of AIS feedback?

Yes, once your input has been successfully submitted, the activity history tab will be updated, and you’ll be able to download the Acknowledgment Receipt for the AIS information. You will also receive confirmations via SMS and email.