ITR filing for FY 2025-26 is now open. Before filing, every taxpayer should review their Annual Information Statement on the Income Tax portal. The department already holds detailed transaction data reported by banks, employers, brokers, registrars, and other institutions. Where the ITR does not match this data, automated processing under Section 143(1) flags the discrepancy without any manual intervention.

One critical point: reporting entities are required to submit their Statement of Financial Transactions for FY 2025-26 by 31 May 2026. AIS data will only be complete from 1 June onwards. Filing before reconciliation may mean filing against incomplete information.

What the AIS Contains

  • TDS and TCS credits across all income heads.
  • Interest income from fixed deposits and savings accounts on an accrual basis, not a receipt basis. A three-year FD reports interest annually even if the taxpayer receives it only on maturity.
  • Dividends, capital gains from securities, mutual funds, and property transactions.
  • High-value transactions including cash deposits above Rs 10 lakh, property purchases above Rs 30 lakh, and share or bond purchases above Rs 10 lakh.
  • GST turnover reported by the GST Network, cross-referenced against declared business income.

Where Mismatches Commonly Arise

  • FD interest reported on an accrual basis in the AIS but declared on a receipt basis in the ITR.
  • Mutual fund switches treated as redemptions in the AIS but omitted from the ITR.
  • Professional income reported via TDS by clients in the AIS but not fully declared in the ITR.
  • Property sale proceeds reported at full value by the registrar without the cost of acquisition correctly claimed.

What Happens When AIS and ITR Do Not Match

  • A Section 143(1) intimation is issued automatically, raising a demand for tax on unreported income plus interest under Sections 234A, 234B, and 234C.
  • Where the mismatch is material, reassessment proceedings under Section 148A may follow.
  • Incorrect AIS entries can be disputed on the Income Tax portal. Where the reporting entity confirms the entry, the income must be declared or the discrepancy explained.

Before You Click Submit

The AIS is not a summary of what the department suspects. It is a record of what it already knows. Filing an ITR that does not account for AIS data is not a gap. It is a mismatch the system will find. Allow two to three weeks for AIS review, feedback, and correction before submitting the return for FY 2025-26.