AIS vs 26AS mismatches: Avoid tax scrutiny with these tips

As return filing gains momentum, most taxpayers are busy collecting documents, calculating deductions, and trying to meet the deadline without a hitch. Yet, what gets overlooked in this rush is a silent trap that could lead to unwanted attention from the Income Tax Department—a mismatch between two important documents: the Annual Information Statement (AIS) and Form 26AS. Increasingly, discrepancies between these two records are prompting scrutiny notices, even for salaried or middle-income taxpayers who otherwise believe their filings are in order.

"Traditionally, Form 26AS has been the go-to document for taxpayers. It is a tax passbook, reflecting the tax deducted at source (TDS) by employers or banks, advance tax payments, and any refunds issued,” says Avnish Arora, Executive Director, Direct Tax, Forvis Mazars.

In recent years, the Income-Tax department has introduced the AIS, a more detailed financial report that extends beyond traditional tax information. “The AIS captures a wide range of financial data: from interest earned on your fixed deposits and savings accounts, to dividends, mutual fund transactions, stock market trades, property purchases and sales, and even large credit card expenditures.

Issues arise when your Income Tax Return (ITR) doesn’t match the details in your AIS or Form 26AS. For instance, forgetting to report interest earned from a fixed deposit but not reflected in the ITR can trigger scrutiny, as banks report such income. High credit card spends, without commensurate income, could be another area of challenge, or unreported property transactions, can also raise red flags if not properly reflected in your return.

Therefore, before filing returns, one must download both Form 26AS and AIS from the Income Tax portal and reconcile every single number with your financial transactions, bank statement, etc. "If you find errors in the AIS, the portal now allows you to submit feedback and request corrections. Ignoring this, or treating them as optional, is no longer wise in a tax environment that is increasingly digital, data-driven, and automated," said Arora.

AIS and Form 26AS reflect how the tax department sees your finances. Arora says, "If your ITR doesn’t align, you could face questions or scrutiny. So, before filing, review both carefully and ensure your numbers match. In taxes, uniformity matters more than ever."