Mumbai: Before filing an income tax return (ITR), taxpayers compare their Annual Information Statement (AIS) with Form 26AS. However, even when the details in both documents match, the Income Tax Department
may send a notice.
Form 26AS mainly contains details of tax deducted at source (TDS), tax collected at source (TCS), advance tax and self-assessment tax. AIS provides information linked to a PAN, including salary, interest, dividends, shares, mutual funds and property transactions.
Tax experts say checking both statements is important, but it does not guarantee that a taxpayer will avoid scrutiny.
Five Key Reasons
Incorrect ITR details: A notice may be issued if salary, interest, dividend income or capital gains are missing, incomplete or wrongly reported in the return, even when AIS and Form 26AS are correct.
Wrong income head: Reporting capital gains as income from other sources, or showing business income under an incorrect head, may invite questions from the department.
Excessive deductions: Unusually high claims under Section 80C, Section 80D, HRA, home loan interest or capital gains exemptions may be checked closely.
High-value transactions: Large bank deposits, property purchases, stock or mutual fund investments, foreign remittances or heavy credit card spending may trigger a notice if they do not match declared income.
TDS mismatch: A difference between the TDS credit claimed in the ITR and the department’s records may lead to an adjustment or notice during processing.
Checks Before Filing
Taxpayers should also compare Form 16, salary slips and bank statements. Capital gains statements and broker reports must be checked carefully. Home loan borrowers should verify interest certificates. Investment proofs, tax challans and records of foreign income or assets should also be reviewed.
What To Do?
Read the notice carefully and compare it with the ITR and supporting records. If the return is correct, reply within the deadline with proof. If there is an error, correct it by filing a revised return or using the applicable tax process.
