AIS and TIS Anomalies: When Data Tells a Misleading Story!
[Query 1]
First Issue: My Annual Information Statement (AIS) / Tax Information Summary (TIS) is showing all the deposits of a PAN number without checking whether the PAN card holder is the primary holder or joint/secondary holder. In bank FDs, Joint Holder/Secondary Holder or nominee has no significance during the lifetime of the primary holder. Income earned during a financial year is also the tax liability of the primary holder. Many people add some close relatives as joint holders, as a precaution. System should show only those deposits where the person concerned is the primary holder. By adding all deposits, where the person is only a joint holder, an impression is created that the person is having income much higher than what the ITR reflects and thereby invites scrutiny and unwanted show cause notices.
Second Issue: I have noticed a wrong presentation of figures in AIS/TIS. For example, if I had, say, Bank FDs for Rs.30 lakhs maturing during the financial year and the accumulated amount on maturity, including interest is, say, around Rs.35-36 lakhs and if I add some more money and take new FDs for Rs.40 lakhs, the system shows that I have taken new term deposits for Rs.40 lakhs whereas it doesn’t show that I had Rs.35-36 lakhs invested out of old FDs. Ultimately, it gives the impression that I have added Rs. 40 lakhs of FDs during the year whereas the net addition actually is only Rs. 3-4 lakhs. If the system is tracking new FDs, it should also track old/maturing FDs during the year. By showing only the new term deposits & ignoring the matured/surrendered deposits in the same year, it portrays the wrong picture about the actual investment of the year.
How to counter these anomalies in projecting a wrong impression in AIS/TIS? I would request you to kindly bring these anomalies to the authorities concerned, to order a proper rectification of these errors please. [kasiwarrier56@yahoo.co.in]
Opinion:
There’s a saying: “Half-truths are more dangerous than lies.” And AIS, despite being a technological marvel, sometimes serves you just that-a half-truth, with a garnish of confusion. The issues raised above are not only valid but are increasingly becoming a source of concern for honest taxpayers. Let’s break down the two key issues in the AIS/TIS presentation:
1. Joint Holder Confusion – When PAN is Present, but Income Isn’t:
AIS behaves like that over-curious relative at weddings—if your name appears on a list, they assume the laddu is yours! Yes, AIS includes deposits made under any PAN, regardless of whether that person is the primary or secondary holder. It tags the deposit in the name of all joint holders without appreciating that all may not have beneficial ownership & earner of interest.
Being a joint holder in a bank FD is like being a guest in a five-star hotel room. You’re there, but the bill generally goes to the one who booked it- the primary holder!
Legal Stand:
As per tax law, income is taxable in the hands of the beneficial owner, not merely based on PAN in FDR. Hence, if you’re only a secondary/joint holder & have no beneficial interest then the interest income belongs to the primary holder, and yes, including it in your AIS is misleading. Taxpayers may note that the Income Tax Portal allows them to submit the feedback for each line item in AIS by choosing one of the following drop-box options:
- Information is incorrect
- Not relating to this PAN
- Duplicate entry.
In the comments section, one can explain that he is not the primary or beneficial holder of the deposit.
2. New FDs Shown, Old FDs Ignored – The One-Sided Story:
Here’s the classic illusion: You got matured FD worth ₹ 35 lakhs and reinvest ₹ 40 lakhs (including ₹ 5 lakhs from your own pocket). AIS shout: “New deposit of ₹ 40 lakhs!” but doesn’t whisper a word about the ₹ 35 lakhs that just matured. This one-sided picture creates an inflated view of a taxpayer’s cash/investment flow as is happening in your case as well. Result? It appears as if you had invested a higher amount even though the net addition is minimal. This discrepancy does trigger automated alerts or scrutiny, especially if your ITR shows limited capital inflow or income, leading to mismatch notices or demands for explanations. The information in the AIS/TIS is the result of mandatory data filing mandated by the Income Tax Department for by various reporting entities in SFT (Specified Financial Transactions). In the case of a bank, they are required to provide the data of the New FDR done in the bank and not the FDR Matured. As a result, the story in the AIS/TDS is one side of the coin only.
The intent behind AIS/TIS is laudable-to increase transparency and pre-fill data for ease of compliance. But, as with any system, data without context can be dangerous. The present reporting system would yield a distorted picture. CBDT need to understand that the reflection of sudden high amount is a cause of concern for every taxpayer even though the same is backed by strong documents. For better and proper tax administration, it would be better if the CBDT amends the SFT requirements so as to (i) make banks report the maturity/redemption data of FDs alongside new investments or (ii) provide the feedback space for explaining the content of the AIS/TIS even in such cases which is there in your query. In short, for all AIS/TIS item, a new drop box column may be added in addition to existing three drop box options discussed hereinabove.
Call to the Authorities:
AIS and TIS are great tools but need refinement. Until then, the onus is on you – the taxpayers – to stay vigilant, give timely feedback, and maintain adequate records. Just like GPS without accurate coordinates can lead you off course, AIS without full context can mislead even the best of intentions. Let’s hope that future versions of AIS/TIS become not just informative-but truly intelligent.
[Views expressed are the personal view of the author. Readers are advised to seek professional advice before taking any decisions. Readers may forward their feedback & queries at nareshjakhotia@gmail.com. Other articles & response to queries are available at www.theTAXtalk.com]
