News

Published: June 26, 2023
Updated: June 26, 2023

Taxpayers Face Challenges with Annual Information Statement as Important Details are Missing

The recently introduced Annual Information Statement (AIS) by the Central Board of Direct Taxes (CBDT) is causing headaches for taxpayers due to crucial omissions. Although the AIS is intended to replace Form 26AS and provide a more comprehensive overview of an individual's tax-related information, it fails to include important details such as taxes paid. This article explores the implications of the expanded AIS and the challenges faced by taxpayers and chartered accountants (CAs) in navigating the new system.

Shift in Position and Scope of AIS:

The AIS has recently been relocated from the services tab on the income tax portal to a more prominent position as the third bar on the main page when taxpayers log into their accounts. The CBDT has mandated that the AIS should now contain all the information acquired by the Income Tax Department about an individual, rendering the old Form 26AS obsolete for many data fields such as advance tax and self-assessment tax.

Mixed Reactions from CAs:

While some CAs welcome the consolidation of forms and the expanded scope of the AIS, others express concerns about its length and complexity. The AIS includes multiple entries and rows of data, often leading to duplication and confusion. However, a summary statement is provided alongside the detailed AIS, offering a way to navigate through the information overload.

Crucial Details Missing:

Despite the AIS's comprehensive nature, taxpayers still need to refer to additional documents to gather the necessary details for filing their income tax returns. For example, while the AIS mentions TDS and salary payment information, taxpayers still require the detailed Form 16 to provide a breakdown of their salary in their tax returns. Similarly, the capital gains figures provided in the AIS lack accuracy as they do not consider the actual purchase date or cost, necessitating the need for statements from stockbrokers.

Missing Pre-filled Details:

Basic details mentioned in the AIS are not automatically pre-filled in the income tax returns, causing inconvenience for taxpayers. Deductions for savings bank interest, which are captured in the AIS, are not directly reflected in the pre-filled tax returns. This oversight has led to individuals paying taxes on interest that should have been eligible for deductions under relevant sections.

Delayed Reflection of Taxes Paid:

The transition to the AIS has resulted in delays in reflecting taxes paid, particularly self- assessment taxes, in taxpayers' statements. Although taxpayers paid their taxes within the specified timeframe, these payments may not be visible in the AIS due to changes in the tax payment process. Tax professionals advise waiting before submitting tax returns if taxes are not reflected in the AIS to avoid potential complications and notices.

Ensuring Accuracy and Feedback:

Taxpayers are advised to carefully review their AIS and report any discrepancies or errors to ensure accurate pre-filled tax returns. Feedback options provided within the AIS can be used to address any issues and avoid potential notices resulting from mismatched numbers.

While the AIS was introduced with the intention of providing a comprehensive overview of an individual's tax information, it has presented challenges for taxpayers. Crucial omissions, the need for additional documents, and missing pre-filled details have caused confusion and frustration. It is crucial for taxpayers to navigate the AIS carefully, report errors, and ensure the accuracy of their tax returns.