The Central Council for Direct Taxes recently announced the availability of the Annual Information Declaration (AIS) for the taxpayer. There is curiosity all around in the minds of taxpayers as to what it is and what implications it has for taxpayers. Let’s discuss.
What is AIS
So far we have a 26AS statement which mainly provides details regarding taxes deducted / levied on your income as well as details of taxes you pay directly. It also contains the details of the income tax refunds as well as the details of the interest paid to you on that refund. Now the government intends to expand the scope of details that would be available to the taxpayer, which will help them complete their tax returns more accurately. It is with this aim of better compliance by the taxpayer that the government has set up the AIS. The AIS is nothing more than a statement of financial transactions provided to it by various entities with regard to a taxpayer, collated by the tax service on the basis of the PAN.
AIS has two components. One is the Taxpayer Information Summary (TIS) and the other is an appropriate AIS detailing the information contained in the TIS.
What details are available in your AIS
There is a general perception that is created that the details of all your financial transactions are available from the government and all of those transactions will be reflected in the AIS, which is not true.
In addition to the details that are currently available to you in Form 26AS, the AIS has details of all transactions that are reported by certain entities in the annual statement of financial transactions that they are required to provide to the tax department. . These entities include banks, registrars, regional transport bureau, licensed foreign exchange dealers, stock exchanges, mutual funds, companies issuing stocks and bonds, the RBI, and all taxpayers. subject to withholding and collection of withholding tax. Transactions that are reported include details of the various income you receive like dividends, interest, rent, professional fees, etc. Likewise, transactions of buying and selling / redeeming stocks and mutual fund shares beyond a certain threshold in total during the year are also reported. This also includes the purchase of registered goods above thirty lakh rupees. It further includes transactions with banks such as depositing cash, purchasing drafts, paying credit card dues, fixed deposits made, etc.
There is information that your savings bank account interest details will also be available under AIS which I doubt as banks and post offices are currently not required to provide the bank interest details savings to the income tax service as no tax is required to be deducted unless you are a non-resident where banks withhold tax even on savings interest from the bank account.
Please note that your details will only be reflected in the AIS if the total amount of the transaction falling under this category and with this entity exceeds the prescribed threshold limit.
What do you have to do?
If you find that some of the transactions reflected in the AIS do not belong to you, you have the option to report these transactions online and the AIS is changed to that extent while retaining the original information as well as the value you declared. If you have jointly invested in mutual funds, the value of mutual fund transactions reported in your AIS will be higher because mutual funds are required to report the value of transactions against all names. holders and, to that extent, it is a duplication. of data. In such a case, you don’t have to worry because such a difference is explainable. However, if there is a transaction of the nature that you did not complete, report this inaccuracy online to protect your interests.
Moving forward in AIS
Uploading the AIS to your account is part of “Project Insight” in which the income tax service intends to verify tax evasion and will use artificial intelligence to detect evasion cases fiscal. In the future, the income tax department may also require various entities to report the details of cash transactions made with them. For example, the department may ask online sellers like Amazon and Flipcart to report details of cash transactions above a certain threshold, even if buyers’ PAN number is not available with them. Based on the address and name the income tax service will be able to track these transactions in your PAN and include them in your AIS. So, those dealing with black money have to worry and nothing to fear from honest taxpayers.
As the AIS system stabilizes, the Income Tax Service may discontinue Form No. 26 AS because the details currently available in 26AS are already included in AIS.
Balwant Jain is a tax and investment expert and can be contacted at firstname.lastname@example.org and @jainbalwant on Twitter.
Never miss a story! Stay connected and informed with Mint. Download our app now !!