How to Correct Unreported Income Reflected in AIS: Detailed Guide with Latest Updates
- PRITI SIRDESHMUKH
- 7 hours ago
- 10 min read
The Annual Information Statement (AIS) serves as a consolidated record of your income and financial transactions reported by employers, banks, and financial institutions. However, discrepancies like unreported income or incorrect TDS entries can disrupt your income tax return filing process. Correcting these issues before filing ensures accuracy, prevents penalties, and helps maintain compliance with the Income Tax Act, 1961.
Filing accurate returns begins with ensuring that every source of income—salary, interest, or capital gains—is correctly reflected in AIS. If unreported income appears, it must be rectified immediately using the Income Tax Department’s feedback mechanism or by filing a revised return before the due date to avoid scrutiny or penalty.
Table of Contents
Importance of Correcting Unreported Income in AIS
Correcting unreported income in the Annual Information Statement (AIS) is essential to ensure accuracy in income tax reporting and compliance with the Income Tax Act, 1961. AIS serves as a consolidated statement of all your financial transactions reported by banks, employers, mutual funds, and other institutions. When income is missing or misreported, it can lead to discrepancies between your AIS and the Income Tax Return (ITR). These inconsistencies may result in scrutiny, penalties, or delayed refunds. Timely correction of such discrepancies helps avoid interest charges under Sections 234A, 234B, and 234C and ensures your return reflects your true income position. It also prevents unnecessary notices and maintains your credibility as a compliant taxpayer.
Step-by-Step Guide to Correct Unreported Income in AIS
Correcting unreported income in AIS involves a systematic process that ensures your data matches the actual financial records. Begin by logging into the official income tax portal using your PAN and password. Access the AIS section to view the list of all financial transactions. Compare this data with your personal documents like Form 16, Form 26AS, salary slips, and bank statements. If you identify discrepancies or unreported income, select the relevant transaction and submit feedback through the “Add Feedback” option. Provide details of the correction or clarification required. The Income Tax Department will verify this feedback with the concerned source, such as your employer or financial institution. Once verified, the corrections are reflected in your AIS, and you can proceed to file or revise your ITR based on the updated information.
How to Access and Review Your AIS Report
To access your AIS report, log in to the Income Tax e-filing portal using your PAN credentials. From the dashboard, navigate to the ‘Services’ tab and select ‘Annual Information Statement (AIS)’. The AIS section displays income data reported from multiple sources, including salary, dividends, interest, and property transactions. Download the statement in PDF or JSON format to review it carefully. Compare every entry with your own records such as bank passbooks, mutual fund statements, and Form 26AS. Pay special attention to entries showing higher income, missing TDS credits, or duplicated transactions. This review process helps in identifying potential mismatches and ensures your ITR reflects accurate financial information.
Identifying and Verifying Unreported Income or Errors
Identifying unreported income or mismatches in AIS requires careful cross-verification with your financial records. Common errors include incorrect TDS entries, duplication of transactions, or income reflected under the wrong PAN. Check for missing income sources such as fixed deposit interest, capital gains, or dividends that may not have been declared earlier. Use your Form 16, Form 26AS, and bank statements as benchmarks to validate data. If the AIS shows higher income than your records, verify whether it’s due to cumulative interest reporting or an error by the reporting entity. Rectifying such errors early helps prevent the issuance of demand notices or mismatched tax liabilities during return processing.
Submitting Feedback for Incorrect Transactions in AIS
If you find incorrect or missing information in your AIS, use the built-in feedback mechanism to submit corrections. Within the AIS portal, select the transaction you want to correct and click on “Add Feedback.” Choose the appropriate feedback option such as “Information is incorrect,” “Information is duplicate,” or “Information relates to other PAN.” Provide a detailed explanation or attach supporting documents if required. Once submitted, the feedback is reviewed by the Income Tax Department and verified with the reporting source. After successful verification, the updated information is reflected in your AIS. Keeping a record of all submitted feedback and acknowledgment receipts ensures transparency and serves as evidence in case of future queries.
Filing a Revised Return After AIS Correction
If you have already filed your ITR before identifying discrepancies in AIS, you must file a revised return under Section 139(5) of the Income Tax Act. The revised return should include corrected income details as per the updated AIS. Log in to the e-filing portal, select “File Revised Return,” and enter the original acknowledgment number. Update the income, deductions, and TDS details to match the corrected figures. Submitting a revised return ensures that your final return aligns with the AIS and prevents possible penalties or notices for underreporting. It is advisable to file the revised return well before the end of the assessment year to avoid complications in refund processing or further scrutiny.
How to Verify and Confirm Updates in AIS
After submitting feedback, it is important to verify whether the corrections have been accepted by the Income Tax Department. Log back into your AIS portal after a few days and review the updated report. Check if the feedback status is marked as “Accepted” or “Updated.” If certain corrections are still pending, you can follow up by rechecking the reporting entity’s filings, such as TDS returns or bank-reported data. Confirming updates before filing or revising your ITR helps maintain accuracy and ensures there are no discrepancies that could trigger a notice under Section 143(1). Keeping a digital copy of the final AIS also helps in future assessments or audits.
Common Reasons Behind AIS Discrepancies
Discrepancies in AIS occur due to several reasons. The most frequent cause is delayed or incorrect reporting by banks, mutual fund houses, or employers. Sometimes, TDS data may be filed under the wrong PAN or reported multiple times. Interest income from fixed deposits or savings accounts often gets missed when not reflected in Form 16. Dividend reinvestments or capital gains reported by registrars may also lead to mismatched entries. Another reason is the cumulative reporting of financial transactions, where partial-year data is mistaken for annual totals. Regular monitoring of AIS ensures such discrepancies are detected early and resolved before they affect your tax filing.
Mistakes to Avoid While Correcting Unreported Income
When correcting AIS discrepancies, many taxpayers make avoidable mistakes that complicate the process. One common error is declaring new income sources directly in the feedback section instead of filing them properly in the ITR. Another is failing to maintain proof of feedback submission or acknowledgment receipts. Some taxpayers also make the mistake of ignoring minor mismatches, assuming they won’t attract attention, which often results in scrutiny. Avoid submitting incomplete explanations or unverifiable corrections, as these can delay resolution. Always cross-check updates before filing a revised return to ensure that AIS data and your ITR are fully aligned.
Penalties and Consequences of Ignoring AIS Discrepancies
Ignoring unreported income or discrepancies in AIS can lead to significant penalties under the Income Tax Act. If unreported income leads to underpayment of taxes, the taxpayer may face interest charges under Sections 234B and 234C and penalties under Section 270A for underreporting or misreporting. In severe cases, the department may issue scrutiny notices under Section 143(1) or reopen assessments under Section 147. Additionally, inaccurate filing can delay refund processing or lead to rejection of claims. Maintaining accurate AIS data and correcting mismatches proactively ensures compliance and protects against potential legal and financial repercussions.
How TaxBuddy Simplifies AIS Correction and ITR Filing
TaxBuddy simplifies the process of correcting AIS discrepancies and filing accurate returns through its AI-driven tax filing system. The platform automatically identifies mismatches between AIS, Form 16, and Form 26AS, alerting users to discrepancies before filing. It provides guided correction support and expert-assisted filing options to ensure error-free compliance. With TaxBuddy, users can easily review their AIS, submit feedback, and file revised returns under expert supervision. Its intuitive dashboard helps track correction statuses and avoid missed deadlines. This combination of automation and expert review ensures a seamless, compliant, and stress-free filing experience for every taxpayer.
Conclusion
Correcting unreported income reflected in AIS is a vital step in maintaining compliance, ensuring accurate tax computation, and preventing unnecessary notices. With digital integration and improved AIS systems, taxpayers can now identify and rectify discrepancies efficiently. Platforms like TaxBuddy help make this process effortless through automated AIS tracking, guided filing, and expert support. For anyone looking for assistance in tax filing, it is highly recommended to download theTaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy provides both self-filing and expert-assisted ITR filing plans to cater to different user preferences. The self-filing option allows users to file their income tax returns independently using a guided interface, supported by AI-based recommendations and error checks. On the other hand, the expert-assisted plan connects users directly with qualified tax professionals who manage the entire process — from reviewing AIS and Form 26AS to filing the return and handling post-filing queries. This flexibility ensures that both tech-savvy users and those seeking professional help can file accurate and compliant returns effortlessly.
Q2. Which is the best site to file ITR?
The best site to file income tax returns in India depends on accuracy, ease of use, and post-filing support. While the official Income Tax Department portal is free and accessible to all, private platforms like TaxBuddy offer an enhanced experience through automation, real-time error checks, and personalized expert guidance. TaxBuddy’s platform is built to detect AIS mismatches, recommend deductions, and ensure the filing process is compliant with the latest Income Tax Act provisions. This makes it one of the most reliable and user-friendly options for both salaried individuals and professionals.
Q3. Where to file an income tax return?
An income tax return can be filed online through two main channels — the government’s official e-filing portal (www.incometax.gov.in) or authorized private platforms such as TaxBuddy. Filing through TaxBuddy offers additional benefits like AI-driven data validation, integration with Form 16 uploads, and direct expert assistance. Whether you choose to self-file or seek professional help, e-filing remains the most efficient and secure way to comply with income tax obligations in India.
Q4. What is AIS and why is it important for ITR filing?
The Annual Information Statement (AIS) is a comprehensive record compiled by the Income Tax Department that includes details of income, TDS, and major financial transactions reported by various sources such as employers, banks, and investment firms. It plays a crucial role in ensuring that all income sources are accurately reflected in your ITR. Reviewing AIS before filing helps identify unreported income, verify TDS credits, and prevent discrepancies that could result in penalties or notices. Essentially, AIS acts as a pre-verified financial summary to help taxpayers file accurate and compliant returns.
Q5. How to correct errors in AIS before filing a return?
If you notice incorrect or missing information in your AIS, you can correct it by submitting feedback directly on the Income Tax Department portal. Log in to the AIS section, select the incorrect transaction, and use the “Add Feedback” option to submit corrections. Provide a clear explanation of the discrepancy along with supporting documents, such as salary slips or bank statements. The Income Tax Department will verify your feedback with the reporting institution and update the AIS accordingly. It’s important to complete this correction process before filing or revising your ITR to ensure your return matches official records.
Q6. What happens if unreported income in AIS is not corrected?
Failing to correct unreported income in AIS can have serious consequences. The Income Tax Department may treat the discrepancy as income underreporting or misreporting, leading to penalties under Section 270A. You may also be charged interest under Sections 234B and 234C for short payment or delayed payment of taxes. In some cases, the department may issue scrutiny notices under Section 143(1) or reopen your assessment under Section 147. Correcting AIS discrepancies before filing ensures compliance, prevents unnecessary legal complications, and protects you from financial penalties.
Q7. Can revised ITR be filed multiple times to fix AIS errors?
Yes, revised returns can be filed multiple times within the assessment year, provided the original return was submitted before the due date. Each revised return replaces the previous version and must include all accurate information available at the time of filing. If AIS corrections are made after your initial filing, it’s advisable to revise your ITR once the updates reflect in the system. However, frequent revisions should be avoided as they may delay processing or refunds. Filing through platforms like TaxBuddy helps ensure all discrepancies are addressed before final submission, reducing the need for multiple revisions.
Q8. How long does it take for AIS feedback to reflect?
The processing time for AIS feedback generally depends on how quickly the reporting institution verifies your correction request. In most cases, updates appear within a few working days, but it may take longer if the issue involves multiple third-party entities such as banks or employers. TaxBuddy users can track the progress of their AIS feedback through their dashboard, ensuring that corrections are monitored until they’re fully updated in the system. It’s advisable to wait until confirmation appears in AIS before filing or revising your ITR to avoid mismatches.
Q9. What documents are needed to verify AIS discrepancies?
When correcting discrepancies in AIS, it’s important to have supporting documents that confirm the actual figures. These include Form 16 for salaried income, Form 26AS for TDS verification, bank statements showing interest income, mutual fund or stock statements for capital gains, and dividend payout proofs. If a reporting error originates from an employer or bank, official communication from that entity can also serve as supporting evidence. Keeping these records organized ensures a smoother verification process and supports your feedback submission during AIS correction or revised return filing.
Q10. Can TaxBuddy help in identifying mismatches between AIS and Form 26AS?
Yes, TaxBuddy is equipped with an AI-driven reconciliation system that automatically compares data between AIS, Form 26AS, and Form 16. The system detects mismatches in TDS, interest income, or capital gains and alerts users before they proceed with filing. In addition, TaxBuddy’s experts review these discrepancies and provide recommendations on how to correct them—either through AIS feedback or revised ITR submission. This automated validation ensures error-free compliance and saves time for taxpayers by reducing manual cross-checking efforts.
Q11. Is there a penalty for the late correction of AIS data?
There is no direct penalty for the late correction of AIS data itself, but delaying corrections can indirectly lead to financial consequences. If the inaccuracies result in underreporting or incorrect tax computation, the taxpayer may be liable for interest and penalties under relevant sections. Filing an ITR without addressing known AIS discrepancies can trigger notices or delay refunds. Therefore, it’s advisable to correct errors as soon as they are identified and file or revise your return promptly to ensure compliance and avoid unnecessary scrutiny.
Q12. What is the deadline for filing a revised return for FY 2024-25?
For the financial year 2024-25, the deadline to file a revised return is December 31, 2025, unless extended by a government notification. Taxpayers who discover errors or discrepancies after filing their original return can use this period to revise and resubmit their ITR with correct details. It’s best not to wait until the final deadline, as processing delays or unverified AIS feedback could affect accuracy. Platforms like TaxBuddy simplify this process by tracking important deadlines and ensuring that all necessary corrections are made well in advance for smooth and timely compliance.
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