Everything about Annual Information Statement (AIS)

Everything about Annual Information Statement (AIS)

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 Everything about Annual Information Statement (AIS)

The Income Tax Department has been releasing various materials for update and awareness of the knowledge of the taxapyes. One such publication is “Handbook on Annual Information Statement (AIS)”
Annual Information Statement (AIS) is a new avatar of erstwhile Form No. 26AS. It gives a 360 degree profile of the taxpayers.
It is one of the most important documents that is bridging the gap between the taxpayers and tax collectors.
 Let us know everything about AIS.
 Handbook on Annual Information Statement (AIS
  1. About this Document
The objective of this document is to develop common and shared understanding related to Annual Information Statement (AIS) and various information sources.
  1. Background
In order to promote transparency and simplifying the tax return filing process, CBDT vide Notification dated May 28, 2020 has amended Form 26AS vide Sec 285BB of Income Tax Act, 1961 r.w.r.114-I of Income Tax Rules, 1962 w.e.f. 01.06.2020. The new Form 26AS is an Annual Information Statement or AIS which will provide a complete profile of the taxpayer for a particular year.
The Board may also authorise the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or any person authorised by him to upload the information received from any officer, authority or body performing any function under any law or the information received under an agreement referred to in section 90 or section 90A of the Income-tax Act, 1961 or the information received from any other person to the extent as it may deem fit in the interest of the revenue in the annual information statement . The format of Annual Information Statement is as under:
Part A
Permanent Account Number, Aadhaar Number, Name, Date of Birth/ Incorporation/ Formation, Mobile No., Email Address, Address.
Part B
  1. Information relating to tax deducted or collected at source.
  2. Information relating to specified financial transaction (SFT)
  3. Information relating to payment of taxes
  4. Information relating to demand and refund
  5. Information relating to pending proceedings
  6. Information relating to completed proceedings
  7. Any other information in relation to sub-rule (2) of rule 114-I
  8. Annual Information Statement Overview
Annual Information Statement or AIS is comprehensive view of information for a taxpayer displayed in Form 26AS. During preparation of AIS, information processing is required to display complete and accurate information to the taxpayer.
3.1 Objectives
The key objective of AIS are:
  • Display complete information to the taxpayer
  • Promote voluntary compliance and enable seamless prefiling of return
  • Deter non-compliance
3.2 AIS Features
Salient Features of new AIS are as under:
  • Inclusion of new information (interest, dividend, securities transactions, mutual fund transactions, foreign remittance information etc.)
  • Use of Data Analytics to populate PAN in non-PAN data for inclusion in AIS.
  • Deduplication of information and generation of a simplified Taxpayer Information Summary (TIS) for ease of filing return (pre-filling will be enabled in a phased manner).
  • Taxpayer will be able to submit online feedback on the information displayed in AIS and also download information in PDF, JSON, CSV formats.
  • AIS Utility will enable taxpayer to view AIS and upload feedback in offline manner.
  • AIS Mobile Application will enable taxpayer to view AIS and upload feedback on mobile.
Disclaimer: Annual Information Statement (AIS) includes information presently available with Income Tax Department. There may be other transactions relating to the taxpayer which are not presently displayed in Annual Information Statement (AIS). Taxpayer is expected to check all related information and report complete and accurate information in the Income Tax Return.
The schematic flow of information is as under:
3.3 AIS Preparation
Some key information processing steps are:
  • PAN Population: In case no valid PAN is available in the submitted information, the PAN will be populated on matching Aadhaar and other key attributes.
  • Information Display: Generally, the reported information is displayed against the reported PAN holder. The information display logic for specific information such as property, bank account, demat account etc. aims to show information to relevant PAN holders to enable review and submission of feedback
  • Information Deduplication: In case where similar information is reported under different information types (e.g. reporting of interest/dividend in SFT and TDS) the information with lower value will be marked as “Information is duplicate / included in other information” using automated rules.
  • Taxpayer Information Summary (TIS) preparation: The information category wise aggregated information summary for a taxpayer is prepared after deduplication of information based on pre-defined rules. It shows processed value (i.e. value generated after deduplication of information based on pre-defined rules) and derived value (i.e. value derived after considering the taxpayer feedback and processed value) under each information category (e.g. Salaries, Interest, Dividend etc.). The derived information will be used for prefilling of Return.
3.4 AIS Feedback
The taxpayer will be able to view AIS information and submit following types of response on the information:
  • Information is correct
  • Information is not fully correct
  • Information relates to other PAN/Year
  • Information is duplicate / included in other information
  • Information is denied
  • Customized Feedback
3.5 AIS Feedback Processing
The AIS Feedback processing approach is as under:
  • The feedback provided by assessee will be captured in the Annual Information Statement (AIS) and reported value and modified value (i.e. value after feedback) will be shown separately.
  • The feedback provided by assessee will be considered to update the derived value (value derived after considering the taxpayer feedback) in Taxpayer Information Summary (TIS)
  • Information assigned to other PAN/Year in AIS will be processed and information will be shown in the AIS of the taxpayer using automated rules.
  • In case the assigned information is modified/denied, the feedback will be processed in accordance with risk management rules and high risk feedback will be flagged for seeking confirmation from the information source.
3.6 Key Terms
Annual Information Statement (AIS)
AIS is comprehensive view of information for a taxpayer displayed in Form 26AS. It shows both reported value and modified value (i.e. value after considering taxpayer feedback) under each section (i.e. TDS, SFT, Other information)
Reported Value
Reported Value refers to information value as reported by the information source against a PAN.
Modified Value
Modified Value refers to value which has been modified by the taxpayer by submitting feedback. The reported value and value after feedback will be shown separately in the Annual Information Statement (AIS)
Taxpayer
Information
Summary (TIS)
TIS is an information category wise aggregated information summary for a taxpayer. It shows processed value (i.e. value generated after deduplication of information based on pre-defined rules) and derived value (i.e. value derived after considering the taxpayer feedback and processed value) under each information category (e.g. Salaries, Interest, Dividend etc.). The derived information in TIS will be used for prefilling of Return.
Processed Value
Processed Value refers to value generated after deduplication of information based on pre-defined rules. The Processed Value is displayed only in Taxpayer Information Summary (TIS)
Derived value
Derived value refers to value displayed in Taxpayer Information Summary (TIS) which is derived after considering the taxpayer feedback (if any) and processed value. The derived information will be used for prefilling of Return.
Information
Category
Information category is broad information category (refer Annexure A) which combines similar information sources to present a simplified summary to enable pre-filling of ITR.
L1 Level Information
L1 Level Information is the lowest level of information displayed in Annual Information Statement (AIS). Each information is displayed by unique Transaction sequence number (TSN). The taxpayer feedback is always captured at the L1 level. In case when taxpayer provides bulk feedback, the feedback is captured at TSN level. L1 Level display shows both reported value and modified value (i.e. value modified after considering the taxpayer feedback).
L2 Level Information
L2 Level Information is the source wise aggregated value displayed in Annual Information Statement (AIS) as well as Taxpayer Information Summary (TIS). During processing, duplicate information is marked at L2 level. L2 Level display shows reported value, processed value (i.e. value generated after deduplication of information based on pre-defined rules) and derived value (i.e. value derived after considering the taxpayer feedback).
L3 Level Information
L3 Level Information is the information category wise aggregated value displayed in Taxpayer Information Summary (TIS). During processing, duplicate information is marked at L2 level only. L2 Level display shows reported value, processed value (i.e. value generated after deduplication of information based on pre-defined rules) and derived value (i.e. value derived after considering the taxpayer feedback)
3.7 Illustrations
Illustration 1: Display of information reported under both TDS and SFT
Payment of dividend above Rs 5,000 is required to be reported under TDS Statement. Under SFT all dividend payment is required to be reported. In this case, Dividend payment of Rs 70,000 was reported by the Deductor (TAN based) under TDS and 74,000 was reported under SFT by the reporting entity.
Annual Information Statement (AIS)
TDS – Information source (L2 level)
SFT – Information source (L2 level)
Note: In AIS, TDS information and SFT information is reported under sections B1 and B2
Taxpayer Information Summary (TIS)
Note: Information reported under TDS is marked as Duplicate during Processing
Illustration 2: Display of taxpayer feedback
Taxpayer has been provided a facility to provide feedback. If the taxpayer reduces the dividend amount to 73,000 under SFT, the derived value i.e. value derived after considering the taxpayer feedback will be shown both in Annual Information Statement (AIS) and Taxpayer Information Summary (TIS).
Annual Information Statement (AIS)
TDS – Information source (L2 level)
SFT – Information source (L2 level)
Note: The information value after feedback is also shown separately (in brackets)
Taxpayer Information Summary (TIS)
Note: The derived information in TIS is reduced after considering taxpayer feedback. This information will be used for prefilling.
Illustration 3: Display of updation in information
If information is updated by submission of correction statement, the original transaction is marked as inactive and a new transaction vale is added in the view. If the reporting entity submits a correction statement (SFT-17) showing dividend income as 73,000, the same is added as a new transaction.
Annual Information Statement (AIS)
TDS – Information source (L2 level)
SFT – Information source (L2 level)
Note: The original transaction is marked as inactive
Taxpayer Information Summary (TIS)
Note: The processed and derived information in TIS is updated to reflect correction statement
  1. AIS Information Category
The broad categories of Information in AIS summary view are as under:
The key information sources, approach for AIS processing and AIS summary preparation is explained in following paragraphs.
  1. Salary
  2. Rent received
  3. Dividend
  4. Interest from savings bank
  5. Interest from deposit
  6. Interest from others
  7. Interest from income tax refund
  8. Rent on plant & machinery
  9. Winnings from lottery or crossword puzzle u/s 115BB
  10. Winnings from horse race u/s 115BB
  11. Receipt of accumulated balance of PF from employer u/s 111
  12. Interest from infrastructure debt fund u/s 115A(1)(a)(iia)
  13. Interest from specified company by a non-resident u/s 115A(1)(a)(iiaa)
  14. Interest on bonds and government securities
  15. Income in respect of units of non-resident u/s 115A(1)(a)(iiab)
  16. Income and long-term capital gain from units by an offshore fund u/s 115AB(1)(b)
  17. Income and long-term capital gain from foreign currency bonds or shares of Indian companies’ u/s 115AC
  18. Income of foreign institutional investors from securities u/s 115AD(1)(i)
  19. Insurance commission
  20. Receipts from life insurance policy
  21. Withdrawal of deposits under national savings scheme
  22. Receipt of commission etc. on sale of lottery tickets
  23. Income from investment in securitization trust
  24. Income on account of repurchase of units by MF/UTI
  25. Interest or dividend or other sums payable to government
  26. Sale of land or building
  27. Receipts for transfer of immovable property
  28. Sale of vehicle
  29. Sale of securities and units of mutual fund
  30. Off market debit transactions
  31. Off market credit transactions
  32. Business receipts
  33. Business expenses
  34. Rent payment
  35. Miscellaneous payment
  36. Cash deposits
  37. Cash withdrawals
  38. Cash payments
  39. Outward foreign remittance/purchase of foreign currency
  40. Receipt of foreign remittance
  41. Payment to non-resident sportsmen or sports association u/s 115BBA
  42. Foreign travel
  43. Purchase of immovable property
  44. Purchase of vehicle
  45. Purchase of time deposits
  46. Purchase of securities and units of mutual funds
  47. Credit/Debit card
  48. Balance in account
  49. Income distributed by business trust
  50. Income distributed by investment fund
4.1 Salary
The key information sources under this information category are as under:
S.No.
Information
Description
1.
Salary (TDS Annexure II)
Employer submits detailed breakup of salary, perquisites, profits in lieu of salary etc paid to the employee in Annexure II of the TDS statement (24Q) of the last quarter. This information is also provided by the employer to the employee (taxpayer) in Part B (Annexure) of Form 16.
2.
Salary Received (Section 192)
Employer submits TDS quarterly statement (Form 24Q) with details of amount paid to employee and amount of tax deducted from the employee. All salary reported in TDS quarterly statement is provided by the employer to the employee (taxpayer) in Form 16.
The approach for AIS processing and information handling is as under:
  1. For an employer (TAN) and employee (PAN), if salary reported in TDS Annexure II is equal or more than the sum of salary payment in Quarterly TDS Statements (Section 192), all salary payment amount in Quarterly TDS Statements (Section 192) will be marked as “Information is duplicate / included in other information”.
  2. For an employer (TAN) and employee (PAN), if sum of salary payment in Quarterly TDS Statements (Section 192) is more than the salary reported in TDS Annexure II, salary reported in TDS Annexure II will be marked as “Information is duplicate / included in other information”.
iii. The AIS information level feedback can be used for providing following inputs:
  1. Information is correct
  2. Income is not taxable
  3. Information is not fully correct – This functionality can be used to modify salary details.
  4. Information relates to other PAN/Year
  5. Information is duplicate / included in other information
  6. Information is denied
  7. The feedback provided by taxpayer will be shown separately in AIS and will update the value in Taxpayer Information Summary (TIS).
  8. The sum of salary received from all employer will be reflected at Taxpayer Information Summary.
  9. All exempt allowances should be included in Gross Salary. Allowances to the extent exempt u/s 10 and deduction u/s 16 needs to be claimed in the return.
4.2 Rent received
The key information sources under this information category are as under:
S.No
Information
Description
1.
Rent Received (Section 194I(b))
Tenant responsible for paying of rent is liable to deduct tax at source on payment of rent. Deductor reports details of amount paid/credited, date of payment, details of Tax deduction made etc. in Form 26Q. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.
2.
Rent Received (Section 194IB)
Tenant (Individual/HUF) paying a rent of more than 50,000 is liable to deduct tax while making payment to the landlord. Tenant reports details of rent paid amount paid/credited, property details, date of payment and tax deduction details etc. pertaining to rent paid in Form26QC.
3.
Rent/HRA claim of the tenant reported by employer (TDS Annexure II)
PAN of landlord is reported by employee to the employer if exemption is claimed under section 10(13A). Employer reports PAN of landlord to whom rent is paid by an employee in Annexure II of the TDS statement (24Q).
The approach for AIS processing and information handling is as under:
  1. Information reported under section 194I(b), 194IB and co-owner will be summed up at deductor PAN level.
  2. For each tenant (PAN), higher of rent reported through TDS statement (194I(b)+194IB) and rent reported by co-owner of property or reported in Annexure II will be retained for a ‘Landlord -Tenant’ combination and information source with lower value will be marked as “Information is duplicate / included in other information”.
iii. Employer reports PAN of landlord to whom rent is paid by an employee in Annexure II of the TDS statement (24Q). This information will only be shown only when the rent received from the tenant is not reported under other sources. The landlord can use the feedback option ‘’Information is not fully correct” to modify rent details.
  1. The AIS information level feedback can be used for providing following inputs:
  2. Information is correct
  3. Income is not taxable
  4. Information is not fully correct: This functionality can be used to modify rent details
  5. Information relates to other PAN/Year
  6. Information is duplicate / included in other information
  7. Information is denied
  8. The feedback provided by taxpayer will be shown separately in AIS and will update the value in Taxpayer Information Summary (TIS).
  9. The sum of rent received from all tenants will be reflected at Taxpayer Information Summary.
vii. All deductions from house property income like interest on borrowed capital, standard deduction to be claimed in the return.
4.3 Dividend
The key information sources under this information category are as under:
S.No.
Information
Description
1.
Dividend income (SFT-015)
Dividend paid/declared by all companies (reporting entity) is reported under Statement of Financial Transactions (SFT).
2.
Dividend received (Section 194)
Company paying/distributing dividend is liable to deduct TDS from the amount paid subject to the threshold applicable in the act and report through form 26Q (quarterly statement). This information is provided by the deductor to the deductee (taxpayer) in Form 16A.
3.
Dividend on Units of Mutual Fund (SFT-018)
The Registrar and Share Transfer Agent reporst dividend payable on units of mutual funds in Statement of Financial Transaction.
4.
Income received in respect of units of Mutual Funds (Section 194K)
Fund/Unit distributing Income in respect of units of Mutual Funds is liable to deduct TDS from the amount paid subject to the threshold applicable in the act and report through form 26Q (quarterly statement). This information is provided by the deductor to the deductee (taxpayer) in Form 16A
The approach for AIS processing and information handling is as under:
  1. Dividend Income will be listed on the basis of PAN of reportee person, Information Source and value. For dividend reported under SFT-018, the same shall be listed on the basis of PAN of AMC, PAN of reportee person and value .
  2. For each reporting entity, higher of dividend income reported under SFT-015 and amount reported by deductor u/

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