Is The New Annual Information Statement-Making Life Easier Or Harder For Taxpayers?

Interest income from savings accounts, recurring and fixed deposits, dividend income, securities transactions, including mutual funds, and remittances from overseas are all included in the new AIS.

The new Annual Information Statement (AIS) was recently released on the Income Tax Department’s Compliance Portal. It is essentially a tool that provides a full perspective of a taxpayer’s financial transactions throughout the course of a fiscal year. The new AIS also has a feature for collecting online comments.

Interest income from savings accounts, recurring and fixed deposits, dividend income, securities transactions, including mutual funds, and remittances from overseas are all included in the new AIS. AIS also provides a streamlined Taxpayer Information Summary (TIS), which shows the aggregated value for taxpayers, to make ITR filing easier.

However, many taxpayers are unsure if the new AIS will make their lives easier or more difficult.

The new AIS attempts to simplify tax filing by bringing all financial transactions together in one place. It shows all financial and tax-related information for each taxpayer that the Tax Department has.

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According to Abhishek Soni, Co-founder and CEO of Tax2win, inaccurate information (same amount shown twice, wrong details presented, etc.) is included in the AIS in a few situations, causing complications for taxpayers. “However, because the technologies are new, they are projected to become smoother and more hassle-free with time.” This will be helpful to both parties in the long run, the tax agency and the taxpayers,” Soni told FE Online.

“With all of the relevant information in one location, tax filing will be lot easier for taxpayers, and the chances of any important information being missing out in the ITR will be extremely minimal,” he added.

What a taxpaying citizen can do

If a taxpayer believes the data in AIS is wrong, he or she can use the online feedback feature. You may also provide feedback in bulk by providing numerous pieces of information.

Taxpayers will be able to provide online input on the information displayed in AIS, as well as download information in PDF, JSON, and CSV file formats, according to experts.

“The AIS Utility will allow taxpayers to observe AIS and provide input while offline.” A mobile application for the AIS is also available, allowing taxpayers to view the AIS and provide input while on the go. The AIS system was created to increase transparency and streamline the tax system. According to Saraf, the government may also replace Form 26AS with a new AIS for taxpayers.

Utility of the AIS

The IRS has created an AIS Utility that allows taxpayers to see AIS and upload feedback while offline. In the AIS, the reported value and the value after feedback will be displayed separately. If the information is changed or denied, the source of the information may be contacted for confirmation.

Simplified TIS for ITR filing

For each taxpayer, a simplified Taxpayer Information Summary (TIS) has been prepared, which displays the taxpayer’s aggregated value for simplicity of return filing. “TIS displays the processed value (i.e., the value obtained after information is deduplicated using pre-defined rules) as well as the derived value” (i.e. the value derived after considering the taxpayer feedback and processed value). The derived information in TIS will be instantly updated in real-time if the taxpayer offers comments on AIS. The resulting information in TIS will be utilised to pre-fill the Return (pre-filling will be enabled in stages),” according to the Finance Ministry.

What about transactions that aren’t showing up in AIS?

It’s vital to remember that the new AIS incorporates information that’s currently available from the IRS. However, other transactions involving the taxpayer that are not now visible in AIS may exist. As a result, a taxpayer should double-check all relevant information and file a complete and accurate Income Tax Return.

Taxpayers can evaluate the information displayed in AIS and provide comments if it needs to be changed.

Also, while filing the ITR, the value stated in the Taxpayer Information Summary (TIS) may be taken into account. If the ITR has already been filed and some information has been left out, the return may be updated to add the missing information.

“In the event of a discrepancy between the TDS/TCS information or tax payment details displayed in Form26AS on TRACES portal and the TDS/TCS information or tax payment details displayed in AIS on Compliance Portal, the taxpayer may rely on the information displayed on TRACES portal for the purpose of filing ITR and other tax compliance purposes,” the Finance Ministry stated.

The presentation of Form 26AS on the TRACES portal will continue in parallel until the new AIS is validated and fully operational.