Getting started with I-T return filing? Verify your Form 26AS and Annual Information Statement first

July 31 – the due date for filing income tax return (ITR) for assessment year (AY) 2022-23 [financial year (FY) 2021-22] – is just a few weeks away.

So, there is barely any time to lose for individual tax-payers. Even before the process of accessing your ITR form and entering the details, however, you need to tick a crucial box – verifying the details in your Form 26AS as also the Annual Information Statement (AIS).
Also read: All about the Annual Information Statement (AIS)

Compare and verify your tax paid details

Start with carrying out basic checks and have the key documents in place – Form-16, Form 26AS, annual information statement (AIS), and bank as well as capital gains statements. Both Form 26AS and AIS can be downloaded from the Income Tax portal (incometax.gov.in) after logging in. Put simply, AIS provides extensive, comprehensive data than Form 26AS.

Also watch: How to access Annual Information Statement

Form 26AS displays taxes deducted, collected at source
The tax credit statement, or Form 26AS, contains details of tax deducted at source (TDS), tax collected at source (TCS), any advance tax or self-assessment tax paid, and so on. “You will be able to view the summary of your interest income, transactions in immovable property on which TDS is deducted, etc - put simply, the quantum of tax paid by you during the previous year. It helps identify those sources of income on which tax has been deducted and accordingly, the taxpayer may claim credit against such details mentioned in Form 26AS,” says Suresh Surana, Founder, RSM India, a chartered accountancy firm.

For instance, tax deducted by your employer on your salary or your bank on fixed deposit (FD) interest earned by you, refunds issued and also certain specified financial transactions (SFT). Therefore, before you proceed with the return-filing, it is critical to make sure that this information is correct. “Before filing the income tax return, you should check your Form 26AS so that you do not miss out on any income to report and there is no short claim of the tax credit. The income tax department allows only that TDS to be claimed against tax payable which appears in this form,” explains Archit Gupta, Founder and CEO, Clear.in.

This does not, however, mean that you should go solely by Form 26AS. “Taxpayers should not blindly rely on the information in Form 26AS, but use the same only for the purpose of reconciliation,” adds Surana.

Check specified financial transactions
This statement has evolved over time to reflect certain high-value transactions – termed specified financial transactions (SFT) too. For example, cash deposit, purchase and sale of shares, units, bonds, debentures, and property details (beyond the specified thresholds) will be reflected in the statement. So, cash deposits of over Rs 10 lakh in your savings accounts in a financial year will reflect under this section. Similarly, if you purchase a property worth over Rs 30 lakh, it will show up in this statement.

Check both Form 26AS  and AIS
Introduced in financial year 2021-22, the annual information statement (AIS) provides detailed information on a range of financial transactions executed by you. “Annual Information Statement (AIS) provides more detailed information to the taxpayers as compared to Form 26AS. For instance, pending and completed assessment proceedings as well as tax demands, detailed special financial transactions in shares, mutual funds, sale or purchase of immovable property, interest and dividend, foreign remittances, etc,” says Surana.

AIS offers greater clarity and holistic information when compared to Form 26AS. “For example, if, say bank PBB, has credited Rs 2,700 in your account as savings account interest and Rs 50,000 for interest on deposits during the financial year, then Form 26AS will only display Rs 50,000 deposit interest details on which TDS is deducted. But if you check your annual information statement, it will show you details of both transactions (savings and deposits interest),” says Gupta.

In addition, you will also be able to see your bank account details in AIS. Hence, it is a tool that you ought to make use of to avoid filing incomplete or erroneous returns.

Mismatch in ITR filed and Form 26AS can spell trouble
A comparison of your Form-16, income statements and bank interest certificates, among other things, can help you detect any discrepancies and also the reasons for the same. Any mismatch can lead to queries and even notices from the income-tax department.

“In case of any discrepancy in the information provided in Form 26AS, the taxpayer does not have the option of submitting feedback and would be required to approach the tax deductor or collector in order to rectify the error. The taxpayer may confirm with these entities whether the correct PAN has been intimated, and the amount of tax is properly reflected in the TDS return filed by them,” says Surana. Since these tasks can be time-consuming, it is best to commence the return-filing process well in advance so that you have time to complete the reconciliation and rectification, if needed.

Get the discrepancies in AIS rectified at the earliest
The newer facility – AIS – comes with built-in grievance redressal mechanism. To avail this facility online, you need to first log in to the income tax e-filing portal and access the AIS. If you wish to raise a dispute on any figures mentioned in Part B of the statement (which contains income, TDS, SFT details, etc), you need to click on the row which contains the erroneous information.

“A new table with ‘details’ will appear below the information which needs to be corrected. Click on ‘optional’ under the feedback column,” says Gupta. This action will take you to the feedback window and you need to select ‘Feedback type’ from the drop-down menu. You need to indicate the precise issue – incorrect information, partly correct details, duplicate information, and so on.

“Once you select your feedback type, click on ‘Submit’ to let the I-T fix your errors. Post such modification, the AIS will provide both the value reported by the entities as well as the modified values in the AIS,” says Gupta.

An all-clear on the Form 26AS and AIS fronts will pave the way for a smooth and quick ITR filing process.