Here’s How Income Tax Filing in India is Made Easier with the New Annual Information Statement

India is streamlining tax compliance through digitization and easier access to information besides more scope for self-assessment. The new Annual Information Statement (AIS) is the latest such measure, though it will be used in parallel to the existing Form 26A until such time as the tax department indicates. The consolidated statement, available on the tax compliance portal, can be accessed against the taxpayer’s PAN number and will provide more categories of information.

India’s income tax department has announced a new Annual Information Statement (AIS) on the Compliance Portal to make tax filing compliances easier for taxpayers in the country. The new AIS intends to replace the existing Form 26AS, once it is completely validated and operational. Till then, Form 26AS will continue to exist in parallel.

At present, Form 26AS provides a consolidated annual tax statement that includes information on tax deducted/collected at source, advance tax, and self-assessment that is available on the income tax website against a taxpayer’s Permanent Account Number (PAN). The AIS will add additional categories of information.

The impending rollout of the new AIS is in keeping with a major government push for bureaucratic reforms to streamline compliances in India, ease availability of information, and encourage accessibility and multiple uses of data. Over 22,000 compliances have been reduced by union (federal) ministries, state bureaucracies, and union territory ministries under this initiative; about 13,000 compliances have been simplified and more than 1,200 processes have been digitized.

What is the Annual Information Statement and how does it work?

The Annual Information Statement captures information on 46 financial transactions (income, investment, expenditure) done in the previous financial year. In AIS, a taxpayer can view all their tax related information at one place. It provides the taxpayer with an opportunity for comprehensive review of various categories of information, such as that relating to interest, dividend, securities transactions, mutual fund transactions, remittances from abroad, etc. The information so provided is processed to avoid duplicity.

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The taxpayer will also be provided with the facility to submit online feedback of the information provided. If the taxpayer ascertains the information to be incorrect, relating to another person or year, or being duplicate etc., they can avail the feedback facility. Feedback can also be furnished by submitting multiple information at once.

An AIS Utility will be also be provided for taxpayers to view AIS and upload feedback in an offline manner. The reported value and value after feedback will be shown separately in the AIS. In case the information is either modified or denied, the information source may be contacted further for confirmation.

Generating the simplified tax information summary

Additionally, the portal also generates a simplified tax information summary (TIS), which contains the aggregate value to be used during tax filing. The TIS shows the processed value (the value generated after deduplication of information based on pre-defined rules) and derived value (the value derived after considering the taxpayer feedback and processed value). If the taxpayer submits feedback on AIS, the derived information in TIS will be automatically updated in real time. The derived information in TIS will be used for pre-filling of return.

The government has taken several measures to plug tax leaks in the past and the AIS will further tighten the system where the taxpayers will not have much scope for hiding incomes in their income tax returns.

List of financial transactions recorded in the Annual Information Statement

The Annual Information Statement contains details of 46 financial transactions. They are:

1. Salary
2. Rent received
3. Balance in account
4. Cash deposits
5. Cash withdrawals
6. Credit/debit card
7. Dividend
8. Interest from savings bank
9. Purchase of time deposits
10. Interest from deposits
11. Purchase of securities and units of mutual funds
12. Sale of securities of units and mutual fund
13. Interest from other sources
14. Cash payments
15. Receipt of accumulated balance of provident fund (PF) from employer u/s 111
16. Receipts from life insurance policy
17. Withdrawal of deposits from national savings scheme
18. Interest from income tax refund
19. Purchase of foreign currency
20. Rent payments
21. Foreign travel
22. Purchase of immovable property
23. Receipts from transfer of immovable property
24. Receipt of foreign remittance
25. Rent from plant and machinery
26. Winnings from lottery or crossword puzzle u/s 115BB
27. Winnings from horse race u/s 115BB
28. Interest from Infrastructure Debt Fund
29. Interest from specified company by a non-resident
30. Interest on bonds and government securities
31. Income in respect of units of non-resident
32. Income and long-term capital gain from foreign currency bonds or shares of Indian companies
33. Insurance commission
34. Receipt of commission etc. on sale of lottery tickets
35. Sale of land or building
36. Off-market debit transactions
37. Off-market credit transactions
38. Business receipts
39. Business expenses
40. Miscellaneous payments
41. Purchase of vehicle
42. Income distributed by business trust
43. Income distributed by investment fund
44. Income from investment in securitization trust
45. Sale of vehicle
46. Payment to non-resident sportsmen or sports association under section 115BBA

How to access your Annual Information Statement?

The Annual Information Statement can be accessed by clicking on the link Annual Information Statement (AIS) under the “Services” tab on the new Income tax e-filing portal. Taxpayers will be able to download AIS information in PDF, JSON, CSV formats.

This article was first published on November 5, 2021. It was updated on January 10, 2022.

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