Friday, May 20, 2022

This Is How New Annual Information Statement Helps You File ITR

The Income Tax Department has rolled out a new Annual Information Statement (AIS) to simplify the income tax return filing process for the taxpayers.

This Is How New Annual Information Statement Helps You File ITR

Within a few days of announcing various amendments to Form 26AS, the Income Tax Department has rolled out a new Annual Information Statement (AIS). The AIS will include detailed information of a taxpayer’s foreign remittance, mutual fund and other securities transactions, apart from details of the tax collected at source (TCS) and tax deducted at source (TDS).

Simply put, AIS will help taxpayers see most of the tax-related information on various incomes in one place. This will make the income tax return (ITR) filing process easier for taxpayers. Here is what you need to know about AIS.

What Is AIS?

AIS is a revised version of the existing Form 26AS that will include various financial details of the taxpayers along with that of TCS and TDS. The aim is to get a more simplified yet detailed summary related to taxpayers.

The tax department has confirmed that Form 26AS will be there till the time AIS is fully operationalised. In Budget 2021, the tax department had announced that a revised Form 26AS, known as Annual Information System, would be available with more comprehensive details.

Thus, AIS is more like a simplified taxpayer information summary, with the details of the aggregated value for the taxpayer to make the process of filing ITR easier. AIS will be automatically generated and updated on a real-time based for transactions where PAN (permanent account number) is required. If there is a mistake or anomaly in AIS, the taxpayer can approach the tax department and get it corrected. 

What Information Will It Hold?

AIS includes additional categories of information on interest (savings account, recurring and fixed deposits), dividend, securities transactions including mutual funds, and remittances from abroad and more. For the ease of filing ITR, AIS also provides a simplified Taxpayer Information Summary (TIS), which shows the aggregated value for taxpayers.

The purpose is also to remove duplicate information. The taxpayers can download the AIS information in various formats like PDF, JSON, CSV, etc.

The downloaded version is a simplified TIS with aggregated value including both the processes value (the value generated after deduplication of details based on pre-defined rules) and derived value (generated after considering the taxpayer feedback and processed value). 

How Is It Useful?

The introduction of details along with more information differentiates AIS. “The new changes made in AIS can be said to be version 2.0 of Form 26AS. It will ease the return filing process as it provides the relevant and necessary details.

Also, if the taxpayer is not satisfied with the generated consolidated statement, he/she can submit feedback on AIS and the derived information in TIS will be automatically updated in real-time. That information will be used for pre-filing of (tax) returns,” says Ruchika Bhagat, managing director of chartered accountancy firm Neeraj Bhagat & Co. 

So, most of the information that a taxpayer needs in terms of taxable incomes and taxes paid, to fill the tax return will be available in AIS. Moreover, the taxpayer can check the information and get it rectified, if needed, which will reduce the disputes on tax returns.