Difference Between 26AS and AIS: A Detailed Overview

The new Annual Information Statement (AIS) on the Compliance Portal, which gives taxpayers a comprehensive perspective of their financial transactions made throughout a fiscal year, was introduced by the Income Tax (I-T) department in 2021. The intention was to facilitate taxpayers' filing of their forms, promote voluntary compliance, and—above all—deter non-compliance. Furthermore, it makes it possible for taxpayers to monitor important data including share transactions, tax payments, overseas remittances, interest, tax refunds, TDS or TCS, and mutual fund activities. In this guide, we will explain the difference between 26AS and AIS in detail.

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Table of Contents

What is Form 26AS?

Components of 26AS

What is AIS?

Components of AIS

Differences Between Form 26AS and AIS

Reasons for Replacing Form 26AS with AIS

Conclusion

Most Asked Questions

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What is Form 26AS?

Form 26AS is the yearly consolidated tax statement of the taxpayer. A thorough overview of a person's or company's tax-related transactions, including advance tax payments, TDS (Tax Deducted at Source), and TCS (Tax Collected at Source), is provided by Form 26AS. It makes submitting income tax returns easier and is a vital instrument for guaranteeing tax compliance. Information about paying taxes is displayed in the Payment of Taxes section. This material is trustworthy and dependable.

Components of 26AS

• Details regarding Tax Deducted at Source (TDS) by employers and contractors

• Details regarding Tax Collected at Source (TCS) by collectors

• The assessee's advance tax or self-assessment tax

• Information on any tax refunds that the department may have issued during the previous fiscal year

• Data of Specific Financial Transactions (SFT)—mostly high-value exchanges involving shares, mutual funds, and other securities

• Interest received from banks and other sources (Form 15G/H) without any TDS deduction

• Tax withheld when selling real estate

• Specifics of turnover according to GSTR 3b

What is AIS?

An extensive summary of taxpayer data on Form 26AS is included in the Annual Information Statement (AIS). Securities transactions, interest, dividends, information about foreign remittances, bank, credit card, mutual fund, and demand/refund transactions are all included in AIS in addition to Form 26AS. Taxpayers can comment on the data shown on the AIS. AIS shows the reported and the derived value, such as the value that accounts for taxpayer feedback, under each section. The following are the goals of AIS: 

• Give taxpayers all the information they need, including the option to leave comments online

• Promote voluntary compliance by preventing underreporting of income and enabling easy prefilling of forms

• Discourage non-compliance 

• Accepts taxpayer input regarding any inaccuracies

Components of AIS

Part A: 

• PAN

• Masked Aadhar Number

• Name of the Taxpayer

• Date of Birth/Incorporation/Formation

• Mobile number

• Email address

• Address

Part B: 

• TDS/TCS Details: - Information regarding taxes deducted or collected at the source is displayed in this section. The code, category, source, description, and value of the TDS/TCS information are shown. 

• SFT Information: - This heading displays information that has been received under the Statement of Financial Transaction (SFT) from reporting organisations. It is possible to obtain the SFT code, information value, and information description. 

• Tax Payments: Under numerous sections, including Advance Tax and Self-Assessment Tax, this section provides information regarding tax payments.

• Demand and Refund: - You can view the details of the demand made and the refund that was started (amount and AY) throughout the course of a fiscal year. 

• Other Information: - This section presents information gleaned from external sources, including pay information from Annexure-II, interest on refunds, foreign currency purchases and transfers, and so on.
  

Differences Between Form 26AS and AIS

The following table highlights the differences between Form 26AS and AIS based on different parameters:

With all of your information in one handy location, AIS's comprehensive and complete view of your financial transactions simplifies and streamlines the entire return filing process. In contrast to Form 26AS, which shows all transactions regardless of whether tax has been withheld, AIS shows all transactions. For example, even if tax has not been withheld from a fixed deposit, the interest received will still be reflected in your AIS. The amount of transactions that can be covered by the AIS has no set limit. It represents all of your financial transactions, no matter how big or small, that have been recorded to the income tax authorities by different financial companies. Therefore, your AIS will still show your tiny Rs. 500 investment in a mutual fund through a systematic investment plan. 

Reasons for Replacing Form 26AS with AIS

By providing a simple and easy way for taxpayers to prefill their income tax returns, AIS hopes to promote voluntary compliance. Its goal is to deter taxpayers from non-compliance and cases of tax leakage. Information that was not previously included in Form 26AS is made easier to obtain through AIS. It allows taxpayers to double-check every financial transaction they have made, and in the event of an inconsistency, it provides the opportunity to submit online feedback and expeditiously have the information corrected. In the event of an information discrepancy, the online feedback tool minimises tax return disputes and spares taxpayers from exchanging notices with the income tax department.

Conclusion

In conclusion, AIS is an extension of Form 26AS. It will make filing your return easier because it gathers all the pertinent and essential tax information on different types of income in one location. Additionally, you can correct the consolidated AIS statement by providing online comments if you're not happy with it. 

FAQ

Q1. Are AIS and 26AS the same?

Form 26AS is expanded upon by AIS. Form 26AS provides information on high-value investments, TDS/TCS transactions, and real estate purchases undertaken during the fiscal year.

Q2. What if 26AS and AIS do not match?

The taxpayer should bring up any discrepancies with the information on Form 26AS to the tax deductor and request that he amend the TDS return to correct the error. Get in touch with the deductor and provide any pertinent information and documentation. 

 Q3. How to check 26AS and AIS?

Enter your income tax site login information to view or download Form 26AS. Navigate to the 'e-File' tab on the homepage, pick 'View Form 26AS' from the drop-down menu, and click 'Income Tax Returns'. 

Q4. Can information in AIS be wrong?

If they find mistakes in the financial transactions on their Annual Information Statement (AIS), taxpayers have the right to file a complaint. The tax department will check with the source as soon as you bring up the matter. A notice under the e-verification process may be given if the mismatch persists. 

Q5. What transactions are reported in AIS?

The majority of the data in AIS comes from Form 26AS, which includes information on taxes withheld from income received from salaries, rental income, interest received from banks and other financial institutions, professional income, and other sources. 

Q6. What is the objective of AIS in income tax?

With an Annual Information Statement (AIS), the Indian government hopes to keep track of all the taxpayers' information for a given year. It includes all the information about the incomes of taxpayers, their financial dealings, income-tax cases, tax information, etc. 

Q7. How does the AIS help taxpayers?

As a taxpayer, you can verify all of the financial transactions that you carry out and submit to the income tax authorities by using the Annual Information System. This will help you make sure you have reported all the necessary information on your income tax return and to double-check it. For instance, you are liable for taxes on dividends that you earned during the 2020–21 fiscal year. Because of this, you have to disclose the money in your ITR and pay tax on it, even if it's just Rs 50. The AIS will remind you to submit this Rs 50 if you neglect to do so.

Q8. Is it necessary to provide feedback on AIS income tax?

The taxpayer can comment on data that is shown in AIS. Under each part (such as TDS, SFT, and Other information), AIS displays both the reported value and the modified value (i.e., value after taking taxpayer comments into consideration).

Q9. How does AIS (Annual Information Statement) differ from Form 26AS?

AIS is a comprehensive statement of financial transactions submitted by various entities, such as banks, financial institutions, and other specified persons, to the Income Tax Department. It includes details of transactions undertaken by the taxpayer, which are then reflected in Form 26AS. Unlike Form 26AS, AIS provides a broader view of the taxpayer's financial activities beyond tax-related transactions.

Q10. What is the significance of Form 26AS for taxpayers?

Form 26AS is crucial for taxpayers as it serves as a ready reckoner for verifying the taxes deducted on their behalf and the taxes paid by them. It helps in reconciling the tax credits claimed with the actual tax deposited with the government, thus ensuring accurate income tax filing.

 Q11. How can taxpayers access their Form 26AS and AIS?

Taxpayers can access their Form 26AS through the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal using their Permanent Account Number (PAN). Similarly, AIS can be accessed through the income tax e-filing portal by logging in with the PAN.

Q12. What actions should taxpayers take if they identify discrepancies between their Form 26AS and actual financial transactions?

Taxpayers should thoroughly review any discrepancies between Form 26AS and their actual financial transactions. If discrepancies are found, they should contact the respective deductors or financial institutions to rectify the errors. Additionally, they should maintain proper documentation and evidence to support their claims during income tax assessments.