What is form 26AS and AIS? Which is more important in filing tax returns?

Form 26AS and AIS (Annual Information Statement) are both vital documents for individuals filing income tax returns. While they serve different purposes, understanding their differences and significance is crucial for accurate tax compliance.

What is form 26AS and AIS?
 

"Form 26AS primarily focuses on tax-related transactions, such as tax deducted at source ( TDS)  and tax collected at source (  TCS) deductions, high-value investments, and property purchases. It acts as a consolidated statement of the taxes deducted by various entities on behalf of the taxpayer and helps ensure that the taxes deducted are correctly credited to the taxpayer's PAN," said Swati Jain, CA and Strategic Business Advisor at Arihant Capital 

Verifying the information in Form 26AS is essential to avoid any discrepancies in tax payments.
 

 

On the other hand, AIS is a more comprehensive document that extends the information provided in Form 26AS.

"Alongside tax-related transactions, AIS includes details like savings account interest, dividends, interest on deposits, foreign remittances, and purchase and sale transaction details of securities and immovable property. It offers taxpayers a broader view of their financial transactions during the financial year," said Jain.
 

The AIS was introduced to promote transparency and encourage voluntary compliance among taxpayers. It facilitates "seamless pre-filling of income tax returns," making the tax filing process more convenient and accurate.

Also Read: Check Form 26AS, reconcile with Form 16 before you file your tax return

Previously, taxpayers relied on Form 26AS to ensure that all taxes deducted throughout the financial year were accurately recorded by the Income Tax department. Form 26AS served as a tax passbook, containing detailed information about the taxes deposited to the government against an individual's PAN.

"However, in November 2021, the income tax department introduced the AIS, which surpasses Form 26AS in terms of comprehensiveness. The AIS not only includes tax-related details but also provides information about income from various sources (such as salary, interest income, dividends, and capital gains) received by the taxpayer during the financial year," explained CA Amit Gupta, MD, Sag Infotech.

According to the income tax department's press release, if there are discrepancies between the TDS/TCS information or tax payment details displayed in Form 26AS and AIS, taxpayers should prioritize the information displayed in Form 26AS for the purpose of filing ITR and other tax compliance obligations.

"Individuals should consult both the AIS and Form 26AS when preparing their income tax returns. Form 26AS will now only display TDS and TCS information, while other taxes such as self-assessment tax and advance tax will be reflected in the AIS," said Gupta.

What happens if information in Form26AS is different from AIS?

While it is unlikely for the information in Form 26AS to differ from that in the AIS since they rely on similar sources, there may be instances where the AIS duplicates certain details like TDS from salary or mutual fund dividends.

In the event of errors present in both the AIS and Form 26AS, taxpayers should maintain relevant documentation, such as bank statements, Demat statements, and transaction agreements, for the financial transactions conducted during the relevant financial year.


If there is sufficient documentation for a transaction mentioned in the AIS, taxpayers can rely on it and provide feedback to rectify any inaccuracies.

Similarly, if errors are found in Form 26AS, taxpayers can inform the tax deductor and request a revision of the TDS return to correct the error.

Also Read: Income tax filing: What is the difference between ITR 1 and ITR 2?

It is advisable to keep all relevant documents readily available in case the income tax department requests supporting evidence.

Additionally, AIS allows taxpayers to provide feedback in the event of any discrepancies noticed in the document.