ITR: Why you should check your Annual Information Statement (AIS) even after filing income tax return

Filing your Income Tax Return (ITR) is one of the major financial tasks that you must complete within the deadline. The due date for filing ITR for Assessment Year 2023-24 was July 31, 2023. However, with the ever-evolving landscape of taxation and the advent of technology, your interaction with tax authorities doesn't conclude with the submission of your return. The introduction of the Annual Information Statement (AIS) has meant that you may be forced to retrospectively ensure that your ITR matches the details on your AIS.

The matter becomes more complicated in certain cases if you miss to report any information about income while filing ITR. The AIS continues to be update even after you have already filed your returns and any mismatch detected during processing of your ITR may invite the notice from the Income Tax Department.

Why should you check your AIS?

The AIS isn't a static document that retains its form once your ITR is submitted. It's a dynamic and evolving summary of your financial transactions, with the potential to undergo changes even after your return has been filed. Artificial intelligence tools employed by the Income Tax Department continuously gather data, leading to revisions and updates in your AIS. This makes tackling the AIS an ongoing endeavour, both during the filing process and after. Taxpayers have found their AIS changing even after they have already filed their returns.

The challenge of accuracy

Tax experts emphasise the importance of meticulously verifying your AIS even post-ITR filing. The AIS aggregates information from diverse sources, such as brokers, banks, and financial institutions. This multitude of data points can lead to discrepancies, incorrect reporting, or duplication. For instance, joint property transactions might be reported under the names of both joint holders, leading to confusion. It's crucial to ensure that your AIS accurately reflects your financial transactions to avoid potential discrepancies and tax-related complications.

Addressing discrepancies in AIS

While you might assume that filing your ITR marks the end of the compliance journey, addressing AIS-related discrepancies remains an ongoing obligation. Even after your return is filed, a mismatch in TDS (tax deducted at source) due to revisions in another party's AIS might necessitate rectifications in your return as well. This underscores the need for consistent vigilance and alignment between your ITR and AIS.

Navigating changes and revisions

Due to the ever-evolving nature of AIS, tax professionals have observed clients opting to delay filing their returns to accommodate changes. However, incorporating alterations within the narrow window before the filing deadline can be challenging. Financial service firms update their data based on their individual cycles, causing delays in the availability of accurate information.

To address emerging information, chartered accountants suggest filing revised returns to ensure alignment between your ITR and the evolving AIS. While this mitigates discrepancies, it's important to note that even revised returns might prompt further follow-up from tax authorities.