Your ITR shows ₹10 lakh income. The government's system shows ₹14 lakh. A notice arrives under Section 143(1)(a). This happens to millions of Indian taxpayers every year — not because they filed incorrectly, but because they did not reconcile their return against the Annual Information Statement before filing. ## Two systems, one trap **Form 26AS** is India's primary tax credit statement. It shows TDS deducted, advance tax paid, and self-assessment tax deposits. Most taxpayers know it. **AIS (Annual Information Statement)** was introduced in 2020. It is a comprehensive view of all financial transactions the government has data on: salary, interest, dividends, mutual fund redemptions, equity transactions, property purchases and sales, foreign remittances. It is pulled from banks, stock exchanges, MF RTAs, property registrars, and other reporting entities. AIS is meant to be a complete picture of your financial life. The problem: it is frequently wrong. ## Why AIS errors are so common **PAN attribution errors.** AIS data comes from third-party sources — banks, RTAs, registrars. PAN seeding errors at the source propagate directly to AIS. The most common: a fixed deposit in joint names where both account holders see the full interest in their respective AIS, even though only one is the primary holder for TDS. **Property valuation errors.** AIS pulls property sale consideration from Sub-Registrar Office (SRO) data. SROs record the stamp duty value based on circle rates — not the actual transaction price. If you sold at ₹40 lakh in a market where the circle rate is ₹55 lakh, your AIS shows ₹55 lakh. **Duplicate entries.** MF transactions through multiple distributors or direct-to-regular switches can generate multiple submissions for the same underlying transaction. ## What happens when AIS and ITR do not match The Centralised Processing Centre (CPC) processes ITRs automatically. When AIS-reported income exceeds ITR-declared income, Section 143(1)(a) kicks in — a "prima facie adjustment." The CPC adds the discrepancy to your income and raises a tax demand with interest. You receive a notice. Resolving it requires responding to the CPC, submitting proof, and potentially filing a revised return. It takes months. ## The 5-step prevention process 1. **Download your AIS before filing.** Go to incometax.gov.in → Login → AIS tab. 2. **Cross-reference every entry** against your actual records: salary, interest, dividends, MF redemptions, equity sales, property. 3. **For incorrect entries, submit AIS feedback** in the portal: "Information is incorrect," "Information is duplicate," or "Information relates to other PAN." 4. **Note your feedback reference numbers.** Corrections can take days to weeks. 5. **If filing before corrections reflect:** file based on your accurate income and note disputed AIS entries in the relevant ITR schedule. Do not leave discrepancies unexplained. This process takes 1–2 hours for a straightforward individual return. It prevents notices that take months to resolve. ## The bottom line AIS–ITR reconciliation is not optional. It is the single most effective step to avoid a post-filing notice. **HRA reviews both Form 26AS and AIS as a standard part of every [ITR filing](https://www.harunraaj.com/services/itr-filing). [Get started here](/services/itr-individual-salaried).** ## Frequently Asked Questions ### What is the difference between Form 26AS and AIS? Form 26AS (Annual Tax Statement under Section 203AA) primarily shows TDS/TCS credits, advance tax, self-assessment tax, and refunds. The Annual Information Statement (AIS) is broader — it includes all financial transactions reported by third parties: bank interest, dividends, share transactions, property purchases, mutual fund transactions, and more. ### Which document should I rely on when filing ITR? Both must be reconciled. AIS shows what the government knows about your financial transactions. Form 26AS shows your tax credits. If your ITR income doesn't match AIS data, you risk a notice under Section 143(1)(a). If your TDS claims don't match 26AS, credits will be disallowed. ### How do I correct a mismatch in AIS? You can submit feedback on AIS entries through the Income Tax e-filing portal under the AIS section. For each transaction, you can confirm, modify (provide correct value), or deny (if it doesn't belong to you). The feedback updates your Taxpayer Information Summary (TIS), which is the processed version of AIS used for assessment. ### Can I get a tax notice just for an AIS mismatch? Yes. The CPC at Bengaluru runs automated matching. If your reported income in ITR is lower than the income reflected in AIS — for example, unreported bank interest or share sale proceeds — you can receive an intimation under Section 143(1)(a) with a demand for the differential tax plus interest under Section 234A/B/C. ### Does AIS show cryptocurrency transactions? Yes. From FY 2022-23, AIS includes VDA (Virtual Digital Asset) transactions reported by exchanges under Section 194S TDS provisions. Buy and sell transactions, along with TDS deducted, appear in the AIS. These must be reconciled with your ITR, particularly Schedule VDA. I'm CA Harun Raaj, Visakhapatnam. If any of this affects you or your business, reach out — I'd be glad to help. --- ## See Also - [AIS vs Form 26AS: How to Reconcile Before Filing ITR](https://www.harunraaj.com/blog/ais-form-26as-reconciliation) - [Your RSUs Are Not Just Salary: The Two Separate Disclosures Required in AY 2026-27 ITR](https://www.harunraaj.com/blog/schedule-fa-rsu-foreign-assets-itr-2-ay-2026-27) - [ESOP Tax Deferral for Startup Employees: The 48-Month Mechanism Most Tax Advisors Misexplain](https://www.harunraaj.com/blog/esop-tax-deferral-80-iac-startup-employees) Canonical: https://www.harunraaj.com/blog/form-26as-vs-ais-mismatch-triggers-income-tax-notices