Why Reconciling AIS and TIS is Crucial Before Filing ITR

AIS

Why Reconciling AIS and TIS is Crucial Before Filing ITR

AIS

As Income Tax Return (ITR) season kicks off, many taxpayers are discovering two critical tools on the Income Tax portal — AIS (Annual Information Statement) and TIS (Taxpayer Information Summary). If you’re still relying only on Form 26AS to prepare your return, you might be missing out on vital information — and risking a mismatch notice.

The Income Tax Department now tracks much more than just your TDS. From interest earned on savings accounts to mutual fund redemptions, property transactions, and even high-value credit card payments — AIS and TIS offer a 360° view of your financial activity.

So before you hit “Submit” on your ITR, let’s understand why reconciling AIS and TIS is no longer optional — it’s essential.

AIS

✅ What Is AIS?

Annual Information Statement (AIS) is a comprehensive report that captures nearly all your financial transactions for the financial year. It goes far beyond Form 26AS and includes:

  • Interest income from savings accounts and fixed deposits

  • Dividend income

  • Mutual fund purchases and redemptions

  • Stock market trades

  • Sale or purchase of real estate

  • Credit card spending

  • Foreign remittances

  • TDS/TCS details

  • Income tax payments, demands, and refunds

  • Transactions reported in GST returns (for businesses)

Think of AIS as the tax department’s version of your digital financial diary.

🧾 What Is TIS?

Taxpayer Information Summary (TIS) is a simplified summary of your AIS. It displays:

  • Processed values (based on department’s view)

  • Derived values (based on feedback submitted by you)

TIS is what the Income Tax Department uses as the basis for auto-populating your return. If there’s a mismatch between TIS and your ITR, your return may be flagged for discrepancies or even scrutiny.

🚨 Why You Should Reconcile AIS & TIS Before Filing

Ignoring AIS and TIS could lead to:

  • Under-reporting income unintentionally

  • Receiving a mismatch notice under Section 139(9)

  • Getting picked up for scrutiny in future assessments

  • Delays in processing and refunds

The department is using data analytics more aggressively each year. So, what may look like a minor omission — say, ₹500 interest from a savings account — can trigger compliance flags.

📝 How to Reconcile AIS & TIS (Step-by-Step Guide)

  • Log in to the Income Tax e-Filing portal.

  • Download your AIS and TIS from the ‘Services’ tab.

  • Cross-verify every item — interest income, dividends, mutual fund transactions, TDS, property deals, etc.

  • If any information is incorrect or missing, click on ‘Submit Feedback’ for the respective entry.

  • Ensure that your ITR matches with the TIS processed value wherever applicable.

  • Declare all income, even if no TDS has been deducted.

AIS

⚠️ Common Mistakes Taxpayers Make

  • Ignoring small interest incomes thinking “this won’t matter”

  • Filing only TDS-based incomes, missing capital gains, or exempt incomes

  • Not checking mutual fund redemptions or stock sales properly

  • Assuming brokerage capital gain statements match AIS without verification

  • Missing foreign remittances or high-value credit card expenses listed in AIS

Read More: Understanding Form 15CA and 15CB: Your Guide to Foreign Remittance Compliance

AIS and TIS are no longer just optional tools — they’re central to how the tax department assesses your return. As compliance tightens and technology advances, reconciling AIS and TIS is your best defense against future tax hassles.

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New Tax Relief: One-Time Set-Off of Long-Term Capital Losses Against Short-Term Gains from FY 2026-27

Long-Term Capital Losses

New Tax Relief: One-Time Set-Off of Long-Term Capital Losses Against Short-Term Gains from FY 2026-27

Long-Term Capital Losses

The Income Tax Bill, 2025, has introduced a landmark transitional provision that could bring substantial tax relief to investors and individual taxpayers. For the first time, long-term capital losses (LTCL) incurred up to March 31, 2026, will be eligible to offset short-term capital gains (STCG) starting FY 2026-27.

This one-time window of opportunity, enabled under Clause 536(n) of the new bill, presents a powerful capital gains planning strategy before the new law takes full effect.

What Has Changed?

Under the current Income Tax Act, 1961, Section 74 restricts the set-off of LTCL only against LTCG. This narrow rule has long limited the ability of taxpayers to effectively utilize long-term losses — especially when their gains are largely short-term in nature.

But the new Income Tax Bill changes this — temporarily but significantly.

Long-Term Capital Losses

Key Highlights of Clause 536(n)

Brought forward capital losses, whether long-term or short-term, computed under the old Act and remaining as of March 31, 2026, can be:

  • Set off against any type of capital gains (LTCG or STCG) under the new Act.

  • Carried forward and adjusted for up to eight financial years (i.e., till FY 2033-34).

🔍 This transitional clause removes the old distinction between STCG and LTCG — but only for pre-April 2026 losses.

Why This Matters for Taxpayers

This one-time measure could be a game changer for those who:

  • Hold unutilized long-term capital losses due to a mismatch with LTCG.

  • Are expecting short-term capital gains in the years ahead and want to reduce their capital gains tax.

  • Missed prior opportunities to optimize their loss harvesting due to rigid pairing rules under the 1961 Act.

The provision permits the set-off of any capital loss — whether long-term or short-term — brought forward as on March 31, 2026, against any capital gains under the new Income Tax Bill, 2025, without differentiating between short- or long-term gains.

Action Plan: Capital Gains Tax Planning Before April 1, 2026

Taxpayers should treat this as a tax planning alert and take the following steps before March 31, 2026:

✅ Review Capital Assets: Identify long-term investments that have declined in value.

✅ Consider Selling Loss-Incurring Assets: Book long-term losses by selling such assets before April 1, 2026.

✅ Document and Report: Ensure proper computation and carry-forward of losses under the 1961 Act.

✅ Plan Future Gains Timing: Align potential STCG after FY 2026-27 to absorb these carried forward LTCL.

This strategy can help minimize tax liability from FY 2026-27 through FY 2033-34.

Why This Is a One-Time Relief

This provision is not a permanent change. It is part of the Repeal and Saving mechanism built into the new tax code to smooth the transition from the old regime.

  • Post-April 1, 2026 losses will continue to follow the traditional rules under the new Income Tax Bill.

  • The clause ensures temporary flexibility for existing losses, not a structural overhaul of capital gains taxation.

Some commentators view it as forward-thinking tax reform, while others raise concerns about consistency with broader tax principles. However, for now, it stands as a valuable tool in the taxpayer’s arsenal.

Final Thoughts: Don’t Miss the Window

The new Income Tax Bill, 2025, offers a rare and limited-time opportunity to reset your capital gains tax planning. By utilizing this one-time set-off provision under Clause 536(n), taxpayers can unlock significant savings and efficiently absorb past investment losses.

Read More: Understanding Form 15CA and 15CB: Your Guide to Foreign Remittance Compliance

What You Should Do Next

  • 📊 Re-evaluate your capital loss history

  • 📅 Act before March 31, 2026

  • 👩‍💼 Consult with your tax advisor for tailored strategies

  • 📈 Plan your future gains with carry-forward optimization in mind

⚠️ This relief is time-bound. Use it wisely before the sunset date, and turn your past losses into future tax gains.

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Understanding Form 15CA and 15CB: Your Guide to Foreign Remittance Compliance

Form 15CA

Understanding Form 15CA and 15CB: Your Guide to Foreign Remittance Compliance

Form 15CA

In today’s globally connected business landscape, cross-border payments have become routine for individuals and enterprises alike. However, these transactions are subject to tax scrutiny to ensure compliance with Indian tax laws. To monitor and regulate such foreign remittances, the Income Tax Department mandates the submission of Form 15CA and Form 15CB in specified cases.

These forms act as key instruments for tracking payments to non-residents and ensuring that the correct tax has been deducted at source (TDS), wherever applicable. Moreover, recent trends show that the department has been issuing notices under Section 133(6) and Section 148A based on the information declared in these forms—making it all the more important for taxpayers to understand and comply with the related provisions.

Legal Framework Governing Foreign Remittances

Two main legal provisions govern the compliance related to foreign remittances:

  • Section 195(6) of the Income Tax Act, 1961: Mandates that any person making a payment to a non-resident must furnish information about the transaction, regardless of whether it is taxable.

  • Rule 37BB of the Income Tax Rules, 1962: Details the procedure, forms, and exemptions applicable to such transactions.

What is Form 15CA?

Form 15CA is a declaration submitted by a resident remitter before sending any payment to a non-resident or foreign entity. The form is filed online with the Income Tax Department and must be submitted to the Authorized Dealer (generally the remitting bank) prior to initiating the remittance.

Purpose of Form 15CA

  • To ensure tax deduction at source (TDS) on payments made to non-residents, where applicable.

  • To provide transparency and traceability of foreign remittances.

  • To act as a compliance checkpoint before money leaves India.

Four Parts of Form 15CA

PartApplicability
Part ATaxable remittance not exceeding ₹5 lakh in a financial year
Part BTaxable remittance exceeding ₹5 lakh, and a certificate/order under Section 195(2), 195(3), or 197 is obtained
Part CTaxable remittance exceeding ₹5 lakh, and a Form 15CB (CA certificate) is obtained
Part DRemittance not chargeable to tax under the Income Tax Act

What is Form 15CB?

Form 15CB is a certificate issued by a Chartered Accountant (CA), confirming that the proposed remittance complies with the provisions of the Income Tax Act and relevant Double Taxation Avoidance Agreements (DTAAs).

This form is mandatory before filing Part C of Form 15CA—when the remittance exceeds ₹5 lakh and is taxable.

Key Details in Form 15CB

  • Details of the remitter and beneficiary

  • Nature and purpose of the remittance

  • Currency and amount of remittance

  • Applicability of tax under Indian law

  • Relevant DTAA provisions, if any

  • Rate and amount of TDS deducted

When is Form 15CB Not Required?

You do not need Form 15CB if:

  • The remittance is not taxable under the Income Tax Act.

  • The remittance is ≤ ₹5 lakh during the financial year.

  • A lower/nil TDS certificate has been issued by the Assessing Officer.

Transactions Exempted from Filing Forms 15CA and 15CB

To reduce the compliance burden, Rule 37BB exempts certain transactions from the requirement to file Form 15CA/15CB.

No Filing Required For:

  • Remittances by individuals that do not require RBI approval

  • 33 specified categories of transactions such as:

    • Imports of goods

    • Travel expenses

    • Tuition and education fees

    • Investments abroad

A complete list of exempted categories is available on the Income Tax Department’s website.

Filing Procedure for Form 15CA/15CB

Follow these steps to submit the forms:

  1. Log in to the Income Tax e-Filing Portal.

  2. Go to: e-File > Income Tax Forms > File Income Tax Forms.

  3. Select the applicable form: 15CA or 15CB.

  4. Fill in the relevant details and validate using Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).

  5. Submit the acknowledgment copy to your Authorized Dealer (Bank) before processing the remittance.

Penalties for Non-Compliance

Non-filing or incorrect filing of these forms can lead to:

  • Penalty under Section 271-I: ₹1,00,000 for failure to furnish Form 15CA/CB or for providing incorrect information.

  • Bank refusal to process the remittance in absence of proper documentation.

Practical Tips for Hassle-Free Compliance

  • Always consult a Chartered Accountant for high-value or complex remittances.

  • Maintain records such as invoices, agreements, and Tax Residency Certificates (TRC).

  • Use the latest utility and follow updated guidelines from the Income Tax portal.

Read More: ITR Filing 2025: A Step-by-Step Guide and Important Deadlines

In the evolving regulatory environment, understanding the compliance requirements related to foreign remittances is crucial. Filing Form 15CA and Form 15CB accurately helps avoid penalties, ensures smooth cross-border transactions, and keeps your tax affairs in order. When in doubt, seek professional advice to stay compliant and reduce the risk of scrutiny.

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