Tax Guide

AIS mismatch: why the IT department knows more about your income than you do.

"What is AIS and why does my CA keep asking me to check it?"

Your Annual Information Statement (AIS) reflects all your financial information to the IT department. Rolled out in 2021, it is a consolidation of more than 20 sources – banks (FD interest, savings interest), stock brokers (share transactions), mutual funds, employers, banks (loan disbursements), foreign remittances and many others.

Upon filing your ITR, it is checked by the IT department against your AIS. In case you have a lower income in your ITR compared to your AIS, an automatic notice is issued by the IT department in accordance with Section 143(1). This process is not a manual scrutiny; rather it is an automated one and identifies all discrepancies that exceed ₹50,000.

Some of the discrepancies that arise include non-declaration of FD interest, non-declaration of dividend, non-reporting of redemption from mutual funds, neglecting of savings interest above ₹10,000.

What the law says — exact provisions

Section 285BB

Banks, brokers, registrars required to report specified transactions to IT department for AIS.

Section 143(1)

Automated processing of ITR — discrepancies with AIS trigger demand or refund adjustment automatically.

Section 234F

Late filing fee ₹5,000 (₹1,000 if income ≤₹5L). Not a substitute for correct disclosure.

Section 270A

Under-reporting penalty: 50–200% of tax on under-reported income.

CA Rishabh's verdict

Bottom line

Download AIS from incometax.gov.in before filing. Cross-check every entry with your actual income. Raise a dispute for incorrect entries before filing ITR.