Why You Should Review AIS with TaxBuddy Before Filing Your Return
- Dipali Waghmode
- Nov 11, 2025
- 9 min read
Reviewing the Annual Information Statement (AIS) before filing an income tax return has become a decisive step in ensuring error-free compliance. The AIS compiles income, transactions, and tax credits sourced from banks, employers, mutual funds, property registries, and digital payments, making it a critical tool to verify whether the reported data matches the department’s records. Any mismatch can delay processing, trigger automated notices, or impact refund eligibility. A structured review through TaxBuddy’s AI-driven system helps decode entries, identify errors, and confirm the accuracy of every component before filing, ultimately reducing the risk of discrepancies in FY 2024–25.
Table of Contents
Why Reviewing the AIS Matters Before Filing
AIS now plays a central role in pre-filling returns and tracking high-value transactions. Filing without reviewing it may lead to underreporting, duplications, or missing income categories flagged by third-party reporting entities. Many taxpayers assume their Form 16 or personal working is complete, but AIS often contains additional items such as interest credits, dividend payouts, property transactions, or TDS mismatches. Reviewing AIS ensures the return reflects the correct data, aligns with the tax department’s records, and avoids unnecessary compliance issues.
What AIS Contains and Why Accuracy Is Critical
AIS captures information across multiple categories—tax deducted at source, tax collected at source, SFT transactions, interest entries, securities data, GST-linked activities, property purchases, and foreign remittances. Since every entry is imported from third-party sources, an incorrect or incomplete record may appear without the taxpayer’s knowledge. Accuracy is essential because the Income Tax Department matches the filed return with AIS data through automated processing. Any deviation may be interpreted as underreporting, which can affect subsequent assessments or refund releases.
Common AIS Mismatches That Lead to Notices
Several mismatches commonly trigger automated alerts: • Interest income appearing higher than what is reported • Dividend income not included despite AIS showing credits • Capital gains discrepancies due to broker-reported values • Property transactions mismatched with stamp-duty values • TDS credits shown in AIS but not claimed • TDS not appearing in AIS despite being deducted • Duplicate entries by reporting entities Such issues may lead to notices under sections like 139(9), 143(1), 131, or 148 if the difference is substantial or unexplained.
How TaxBuddy Helps Detect AIS Errors Automatically
TaxBuddy’s AI-based validation system scans the AIS line by line, classifies the transactions, and highlights any mismatch against Form 16, Form 26AS, or income declared by the taxpayer. It interprets raw AIS data—often confusing for users—and converts it into readable categories. The system also catches incorrect entries caused by banks or institutions and flags them for revision requests. Expert-assisted filing ensures that every anomaly is reviewed by a professional before final submission.
TaxBuddy vs Manual AIS Review: Accuracy, Speed, and Compliance
Manual AIS review often becomes overwhelming because the statement consolidates a wide range of financial activities—interest credits from multiple bank accounts, small-value UPI transactions, quarterly dividend distributions, capital gains on securities, and SFT entries reported by various institutions. Sorting through this list requires careful attention to detail, and even a small oversight may create mismatches when the return is processed. Manual reconciliation also requires taxpayers to interpret unfamiliar codes, transaction descriptions, and categorization tags used by banks or financial entities, which increases the chance of misunderstanding or misclassification.
TaxBuddy transforms this tedious process by automatically reading and organising AIS data using its AI-based engine. Instead of manually sifting through long lists, the system captures every entry, identifies the nature of the transaction, and maps it to the correct income category. Real-time validations help detect inconsistencies early, such as duplicated bank entries, incorrect TDS mapping, or provisional values reported by brokers. These automated checks significantly improve accuracy because they leave no room for human oversight.
In scenarios where data appears unclear or contradictory, TaxBuddy’s expert review layer adds human intelligence to the process. Tax professionals analyse flagged entries, verify them with supporting documents, and ensure the return reflects correct values. This dual-layer approach—AI automation supported by expert validation—eliminates the uncertainty that often accompanies manual review.
Speed is another advantage. A manual review may take several hours, sometimes days, especially when taxpayers need to compare AIS with Form 16, Form 26AS, salary slips, bank statements, and contract notes. TaxBuddy completes the initial reconciliation instantly, drastically reducing the time required to move from data collection to final filing.
Compliance accuracy also improves because every entry is verified against official data formats and tax rules for FY 2024–25. Manual review may unintentionally miss schedule requirements, resulting in incomplete disclosures or underreporting. TaxBuddy ensures each income category, deduction, and tax credit aligns with current tax rules and filing standards, which reduces the risk of mismatch notices under sections like 143(1) or 139(9).
Overall, TaxBuddy’s integrated workflow delivers a higher level of precision, efficiency, and compliance than traditional manual review methods.
Impact of AIS Errors on Refunds and Processing Time
AIS errors often result in refund delays because the system must resolve mismatches during 143(1) processing. Underreporting or missed income may result in additional tax computation, while unclaimed TDS may reduce the refund amount. Correcting AIS-based discrepancies after filing usually requires a revised return or responding to a notice. Reviewing the AIS beforehand helps ensure a smooth refund cycle.
How AIS Data Affects Different Income Types
AIS influences multiple income categories: • Salary income may include additional TDS entries not reflected in Form 16 • Savings and FD interest often appears higher because banks consolidate yearly earnings • Dividends may be reported quarterly by companies and need aggregation • Capital gains from stocks, bonds, and mutual funds require reconciling broker-reported figures • Rent received via digital platforms or banks may appear in AIS under SFT Accurate classification is essential for selecting the correct schedules in the return.
How Reviewing AIS Improves Return Accuracy for FY 2024–25
For FY 2024–25, advanced reporting requirements and automated data matching significantly increase the importance of AIS accuracy. Proper review helps apply deductions correctly, claim eligible TDS credits, and ensure no income item is misclassified. It also helps taxpayers avoid filing revised returns later due to overlooked transactions.
When AIS Updates Late and How TaxBuddy Handles Changes
AIS may not always reflect the latest data because institutions update records at different intervals. TaxBuddy’s system identifies missing entries and tracks post-filing AIS updates, allowing taxpayers to take timely corrective action through revised returns if needed. Experts guide the taxpayer on whether the update requires any action or can be ignored as a minor correction.
Checklist Before Filing After AIS Review
• Verify all bank interest entries • Confirm dividend and capital gains data • Match TDS entries with Form 26AS and Form 16 • Reconcile property transactions • Review SFT-reported expenses or deposits • Check for duplicate or incorrect entries • Confirm all income is classified under the correct schedule
Why TaxBuddy Is a Reliable AIS Review Partner
TaxBuddy combines AI-driven analysis with expert review to make AIS interpretation simple and accurate. Errors that would otherwise go unnoticed during manual review are flagged instantly. The platform ensures that income, deductions, and TDS data align with department records, reducing compliance risks and improving the accuracy of the final return.
Conclusion
A complete AIS review is essential for anyone filing a return, especially with the department’s increasing reliance on automated data matching. A structured, AI-backed review prevents mismatches, ensures accurate reporting, and supports faster refund processing. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options? TaxBuddy offers a dual model designed to suit different types of taxpayers. The self-filing plan provides an AI-supported workflow that auto-reads Form 16, extracts financial information, and helps users prepare their returns with guided prompts. For individuals who prefer professional oversight, the expert-assisted plan assigns a tax specialist who reviews documents, interprets AIS and Form 26AS, resolves mismatches, and files the return after verification. Both options ensure accurate reporting and compliance, giving taxpayers flexibility based on their comfort level and complexity of income.
Q. Which is the best site to file ITR? The best platform depends on accuracy, ease of use, support quality, and reliability during peak filing seasons. TaxBuddy consistently ranks high because it blends AI automation with human expertise. The platform simplifies income classification, reconciles AIS data automatically, and prevents calculation or schedule-selection errors. The combination of intelligent tools and expert help makes it a strong alternative to manual filing on the government portal, especially for salaried taxpayers, freelancers, or anyone dealing with multiple income sources.
Q. Where to file an income tax return? An income tax return can be filed on the official Income Tax Department’s e-filing portal or through a trusted private platform that provides automated assistance. Filing directly on the government portal requires manual data entry and schedule selection, whereas platforms like TaxBuddy streamline the process by fetching data from uploaded documents and validating income against AIS and Form 26AS. This reduces filing time and minimizes the risk of mistakes.
Q. What is AIS in income tax? The Annual Information Statement (AIS) is a comprehensive record of financial data maintained by the Income Tax Department. It includes income from salary, interest, dividends, capital gains, rent, and high-value transactions reported by banks, employers, mutual funds, property registries, and payment aggregators. AIS is used to cross-check the accuracy of the information submitted in the ITR, making it a key document for error-free filing under the current compliance system.
Q. What happens if AIS details are missed while filing? Skipping AIS entries while filing may lead to discrepancies detected during automated processing under Section 143(1). Depending on the severity, this can trigger mismatch alerts, demand notices, reduced refunds, or rejection of the submitted return. In many cases, taxpayers must respond through the e-proceedings tab or file a revised return to correct the omission. A thorough review of AIS before submitting the return prevents such complications.
Q. How accurate is AIS for salaried taxpayers? AIS is generally dependable, but it may still contain variations because reporting entities update their data at different times. Salary TDS, interest income, dividend credits, and capital gains usually reflect correctly, though banks or companies may sometimes duplicate entries or report provisional values. Because of these occasional inconsistencies, cross-verifying AIS with Form 16, passbook entries, and broker statements is essential, and platforms like TaxBuddy simplify this validation through AI-based reconciliation.
Q. How does Form 26AS differ from AIS? Form 26AS focuses primarily on tax-related information—TDS, TCS, advance tax, self-assessment tax, and refund status. AIS, on the other hand, provides a much broader picture, listing various income categories, SFT transactions, GST-linked data, foreign remittances, interest credits, and dividend payouts. While Form 26AS helps verify tax credits, AIS helps verify the accuracy and completeness of reported income. Both documents together form the basis for correct ITR preparation.
Q. Can AIS have incorrect entries? Yes, AIS can display incorrect or duplicate entries because reporting institutions sometimes submit incomplete or mismatched data. Common errors include repeated interest credits, provisional capital gains, misclassified SFT entries, and TDS reflected under the wrong PAN. Such issues can be corrected by submitting feedback on the AIS portal, selecting the relevant correction reason. TaxBuddy also identifies these errors and guides taxpayers on which entries require feedback or explanation.
Q. How does TaxBuddy validate AIS data while filing? TaxBuddy’s system evaluates AIS line by line, matching each entry with the taxpayer’s documents—Form 16, Form 26AS, salary slips, bank statements, and brokerage statements. The platform highlights mismatches automatically and prompts expert intervention when deeper review is needed. This multi-layer check ensures that every item in the AIS is addressed, reducing the chances of notices and ensuring full compliance with FY 2024–25 reporting requirements.
Q. Does AIS include foreign income or assets? AIS may include foreign income or asset details only if they are reported by authorized entities or fall under specific reporting rules in India. Many foreign transactions do not automatically appear in AIS, so taxpayers must still disclose foreign income separately under the appropriate ITR schedules. For NRIs or residents with overseas holdings, proper classification is essential, and platforms like TaxBuddy assist in identifying what must be declared even when AIS does not reflect it.
Q. Does AIS mismatch delay refunds? Yes, any mismatch between reported income and AIS data may delay refund processing. During automated processing, the system compares filed figures with AIS entries, and discrepancies often lead to recalculated taxable income or additional queries. Until the mismatch is resolved, refunds may be withheld or adjusted. Reviewing AIS carefully before filing ensures faster and smoother refund outcomes.
Q. How often does AIS get updated? AIS updates occur whenever banks, employers, registrars, mutual funds, and other reporting entities submit fresh data. While many entries update monthly or quarterly, some may appear only during annual reporting cycles. Because timing varies across institutions, AIS may not always reflect the latest values during filing season. TaxBuddy helps interpret these changes and advises whether the updated information impacts return accuracy or requires corrective action.
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