AIS vs ITR Mismatch: Why You May Receive an Income Tax Notice — and Exactly What to Do About It: FY 2025-26 / AY 2026-27

Category: Income Tax

By Abhilash|On June 21, 2026

Income Tax · FY 2025-26 / AY 2026-27

AIS vs ITR Mismatch: Why You May Receive an Income Tax Notice — and Exactly What to Do About It

📅 Updated: June 2026
⏱ 12-min read
🗂 Assessment Year 2026-27

Imagine this — you filed your Income Tax Return (ITR) on time, breathed a sigh of relief, and went back to your normal life. Then, a few weeks later, you find this in your inbox:

⚠ Alert from Income Tax Department
“Mismatch has been observed between information available in AIS and income reported in ITR. Kindly respond / revise your return.”

Panic? Absolutely. But here’s the thing — this is now one of the most common reasons Indians receive an income tax communication. And the good news? It is almost entirely preventable with 15 minutes of attention before you file.

India’s Income Tax Department has evolved into a data-intelligence powerhouse. Every financial transaction you make — from earning FD (Fixed Deposit) interest to selling mutual fund units — is quietly being mapped to your PAN (Permanent Account Number) through a network of reporting institutions. This aggregated data lives in your AIS (Annual Information Statement). When your ITR (Income Tax Return) doesn’t match this AIS, the system flags it automatically.

This guide is your complete playbook — written in plain language — to understand, prevent, and fix AIS vs ITR mismatches.

50+
Transaction types tracked in AIS
285BB
Section governing AIS
₹0
Cost to access your AIS
15 min
Time to reconcile and avoid a notice

📋 What We Cover in This Article

  1. What is AIS (Annual Information Statement)?
  2. What is TIS (Taxpayer Information Summary)?
  3. What is Form 26AS — and is it still relevant?
  4. AIS vs Form 26AS — Key Differences
  5. Why AIS vs ITR Mismatches Happen (8 Real Reasons)
  6. Consequences of Mismatch
  7. Case Studies — Learning from Real Scenarios
  8. Step-by-Step Reconciliation Flow
  9. Pre-Filing Checklist
  10. Frequently Asked Questions (FAQs)

1. What is AIS (Annual Information Statement)?

The AIS (Annual Information Statement) is a comprehensive, PAN-linked financial statement that aggregates data about you from dozens of sources — banks, mutual fund registrars, employers, stock exchanges, property registrars, and more. It was introduced under Section 285BB of the Income-tax Act, 1961 and was made operational from FY 2021-22 onwards.

❝ AIS is your financial mirror — it reflects what the Income Tax Department already knows about your financial life. Before filing your ITR, look into this mirror yourself. ❞

📌 What Does AIS Contain?

Category What It Covers In AIS?
Salary Income Income reported by your employer via TDS (Tax Deducted at Source) returns ✔ Yes
Interest Income Savings bank interest, FD (Fixed Deposit) interest, RD (Recurring Deposit) interest ✔ Yes
Dividend Income Dividends from shares and mutual funds reported by companies / AMCs ✔ Yes
Securities Transactions Purchase / sale of listed shares, derivatives (reported by stock exchanges) ✔ Yes
Mutual Fund Transactions Purchase, redemption, dividend of MF (Mutual Fund) units ✔ Yes
TDS / TCS Details TDS (Tax Deducted at Source) / TCS (Tax Collected at Source) by deductors / collectors ✔ Yes
Property Transactions Purchase / sale of immovable property reported by registrars ✔ Yes
Foreign Remittances Outward / inward remittances reported by banks under LRS (Liberalised Remittance Scheme) ✔ Yes
GST Turnover Information GST (Goods and Services Tax) turnover from GSTN (GST Network) in applicable cases ✔ Yes
Cash Deposits / Credit Card Payments Large cash transactions reported under SFT (Specified Financial Transaction) rules ✔ Yes

📎 Access Your AIS (Official Government Portal)
Visit www.incometax.gov.in → Login with PAN + Password → Services → Annual Information Statement (AIS) → Select FY 2025-26

2. What is TIS (Taxpayer Information Summary)?

The TIS (Taxpayer Information Summary) is a simplified, category-wise summary derived from AIS. While AIS shows every individual transaction, TIS rolls them up into consolidated figures per income category — making it easier to match against your ITR schedules before filing.

Feature AIS (Annual Information Statement) TIS (Taxpayer Information Summary)
Level of Detail Transaction-wise (granular) Category-wise summary
Best Used For Identifying specific transactions / errors Cross-checking ITR schedule-wise figures
Taxpayer Feedback Reflected? Yes (shows original + modified value) Yes (processed value after feedback)
Download Format PDF / JSON PDF
💡 Pro Tip
Use AIS to spot and correct individual transaction errors. Use TIS for final ITR schedule-level reconciliation. Download both before filing — they are free and take 2 minutes to access.

3. What is Form 26AS — Still Very Much Alive!

A popular myth: “Form 26AS is dead. AIS has replaced it.” This is incorrect. Form 26AS remains critical — specifically for TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) credit verification. You cannot afford to ignore it.

❝ AIS tells your financial story. Form 26AS tells whether the taxes on that story were actually deposited with the government. You need both. ❞

What Form 26AS Shows Available?
TDS (Tax Deducted at Source) deducted by employers, banks, tenants, etc. ✔ Yes
TCS (Tax Collected at Source) collected by sellers ✔ Yes
Advance Tax paid by taxpayer ✔ Yes
Self-Assessment Tax paid ✔ Yes
Refund details and TDS on refund interest ✔ Yes
Mutual Fund / Share Transactions ✘ Not in 26AS
Foreign Remittances ✘ Not in 26AS

4. AIS vs Form 26AS — Head-to-Head Comparison

Basis of Difference AIS Form 26AS
Primary Purpose Income reconciliation Tax credit verification
Governing Provision Section 285BB, Income-tax Act, 1961 Rule 31AB / Section 203AA framework
Transaction Types Covered 50+ types Primarily TDS, TCS, taxes paid
Mutual Fund Transactions ✔ Yes ✘ No
Share / Equity Transactions ✔ Yes ✘ No
Foreign Remittances ✔ Yes ✘ No
Taxpayer Feedback Facility Robust — full feedback system available Limited

⚡ Amendment Alert — AIS Introduced from FY 2021-22
Before AIS (Pre FY 2021-22) After AIS (FY 2021-22 Onwards)
Form 26AS was the only consolidated statement; limited to TDS, TCS and taxes paid AIS introduced under Section 285BB; covers 50+ transaction types — MF, shares, property, foreign remittance and more
No formal feedback mechanism for taxpayers to dispute errors Structured online feedback system available — taxpayers can flag incorrect, duplicate or non-taxable entries

📌 Law Reference: Section 285BB inserted by Finance Act, 2020. AIS operationalised from FY 2021-22. Last verified: June 2026.

5. Why Does AIS vs ITR Mismatch Occur? (8 Real Reasons)

Most mismatches aren’t due to tax evasion — they’re due to simple, avoidable oversights. Let’s break down each reason with real-life scenarios you’ll recognise.

🔴 Reason 1: FD / Bank Interest — The Silent Income Nobody Reports

Banks report interest income directly to the IT Department. Yet this is the most commonly missed income head in ITRs. Savings bank interest, FD (Fixed Deposit) interest, and RD (Recurring Deposit) interest — all of it shows up in AIS.

📋 Real-Life Example — Mr. Ravi Kumar: The FD Interest Surprise

Background: Ravi, a salaried software engineer from Pune, earns ₹14 lakh in salary. He holds two FDs (Fixed Deposits) at SBI and HDFC Bank, together earning ₹74,000 in interest during FY 2025-26.

He files his ITR using only Form 16 and forgets to include bank interest. AIS, however, reflects ₹74,000 from bank TDS (Tax Deducted at Source) returns.

⚠ Outcome: Mismatch communication issued under Section 143(1)(a). Additional tax + interest under Section 234B demanded on the ₹74,000 unreported income.
✅ Lesson: Always collect your Annual Interest Certificate from all banks and report interest income under “Income from Other Sources” in your ITR.

🔴 Reason 2: Dividend Income — Even ₹50 Gets Reported

Post Finance Act 2020, dividends are taxable in the hands of shareholders at their applicable slab rate. Companies and Mutual Fund houses report every rupee of dividend to the IT Department against your PAN in AIS — even tiny amounts from old forgotten folios.

⚡ Key Law Change — Finance Act 2020 (Effective from AY 2021-22)
Old Rule (Before AY 2021-22) New Rule (AY 2021-22 Onwards)
Dividends were tax-free in shareholders’ hands. DDT (Dividend Distribution Tax) was paid by the company. Dividends are fully taxable in the hands of shareholders at their applicable income tax slab rate. Report under “Income from Other Sources.”

🔴 Reason 3: Share / Mutual Fund Transactions — Capital Gains Can’t Hide

Stock exchanges (NSE, BSE) and mutual fund registrars (CAMS, KFintech) report every purchase and sale transaction against your PAN under SFT (Specified Financial Transaction) rules.

A common misconception: “My broker deducted STT (Securities Transaction Tax), so I’m covered.” STT is a separate levy — it has no bearing on capital gains tax liability. STCG (Short-Term Capital Gains) and LTCG (Long-Term Capital Gains) must be separately computed and reported in Schedule CG of your ITR.

🆕 Budget 2024 Capital Gains Rate Change — Effective FY 2024-25 (AY 2025-26) Onwards
LTCG (Long-Term Capital Gains) on listed equity & equity MFs: Rate revised from 10% to 12.5% (exemption limit ₹1.25 lakh, up from ₹1 lakh).
STCG (Short-Term Capital Gains) under Section 111A: Rate revised from 15% to 20%.
📌 Reference: Finance (No.2) Act, 2024. Applicable for FY 2025-26 / AY 2026-27. Last verified: June 2026.

🔴 Reason 4: High-Value Transactions That Raise Red Flags

Transaction Type Typical Reporting Threshold Who Reports
Cash deposits in Savings Account ₹10 lakh+ in a financial year Banks (under SFT)
Cash deposits in Current Account ₹50 lakh+ Banks
Purchase of Immovable Property ₹30 lakh+ Property Registrar
Credit Card Payments (Cash) ₹1 lakh+ in cash Banks / NBFCs
Foreign Remittance (LRS) ₹7 lakh+ Authorised Dealer Banks
Purchase of MF / Bonds ₹10 lakh+ Registrars / AMCs

🔴 Reason 5: Claiming TDS That Doesn’t Appear in Form 26AS

A taxpayer claims ₹60,000 TDS (Tax Deducted at Source) in their ITR, but Form 26AS shows only ₹42,000 — because the deductor filed a wrong PAN, hasn’t deposited the TDS, or filed the TDS return with errors.

⚠ Practical Warning
In practice, many taxpayers discover TDS credit shortfalls only after receiving an intimation under Section 143(1) — months after filing. Always verify Form 26AS before claiming TDS credits in your ITR. If credits are missing, chase your deductor to file a correction statement on TRACES (www.tdscpc.gov.in).

🔴 Reason 6: Employer Filed an Incorrect TDS Return (Form 24Q Error)

Your employer deducts TDS every month, but if they file their quarterly TDS returns (Form 24Q) with an incorrect PAN or wrong amount, the credit simply won’t appear in your Form 26AS — even though the money was deducted from your salary. Contact your HR / Payroll team and ask them to file a correction statement via TRACES.

🔴 Reason 7: Blindly Accepting Prefilled ITR Data

The Income Tax Portal auto-fills certain ITR fields using AIS / TIS data. While convenient, this is not always accurate — AIS can contain errors, duplicates, or entries belonging to a different PAN. Never accept prefilled data without verifying against your own records.

🔴 Reason 8: NRI (Non-Resident Indian) Account Income Misclassified

NRI (Non-Resident Indian) transactions in NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts may both appear in AIS. Interest on NRE accounts is exempt from Indian income tax; interest on NRO accounts is fully taxable in India. Misclassification or non-disclosure of NRO income is a growing mismatch area for NRIs.

6. Consequences of AIS vs ITR Mismatch

Communication / Action Section / Provision What It Means for You
E-campaign / e-nudge Voluntary compliance Lowest-stress stage — department invites you to voluntarily correct ITR before formal proceedings
Defective Return Notice Section 139(9) ITR treated as defective; 15 days to rectify — else return is invalid
Intimation with Adjustment Section 143(1)(a) Automatic adjustment to income / tax; demand raised with no officer intervention
Scrutiny Notice Section 143(2) In-depth examination; detailed documentation required
Interest on Underpaid Tax Sections 234B & 234C Simple interest at 1% per month on shortfall in advance tax / self-assessment tax
Refund Delay / Hold Administrative Refund withheld until mismatch is resolved — even minor mismatches can cause delays
Penalty for Under-Reporting Section 270A 50% of tax on under-reported income; 200% if misreporting / concealment is established
❝ A stitch in time saves nine. In taxation, a 15-minute AIS check before filing can save you nine months of notice replies, tax demands, and refund delays. ❞

7. Case Studies — Learning from Real Scenarios

📋 Case Study 1 — Ms. Priya: Salary + FD Interest Oversight

Background: Ms. Priya, a school teacher from Chennai, filed her ITR for FY 2025-26 reporting total income of ₹8 lakh (salary only). She chose the new tax regime.

What AIS Reflected: FD (Fixed Deposit) Interest from SBI: ₹75,000 | Dividend from HDFC Mutual Fund: ₹20,000

What She Filed: Only salary income of ₹8 lakh. Neither FD interest nor dividend was reported.

⚠ Outcome: Intimation under Section 143(1)(a) generated with upward adjustment of ₹95,000 to total income. Additional tax of ~₹14,250 + interest under Sections 234B and 234C demanded.
✅ Lesson: Even under the new tax regime, income from all sources must be disclosed. Reconcile AIS before selecting the regime and filing the return.

📋 Case Study 2 — Mr. Aravind: Property Sale + Capital Gains Not Reported

Background: Mr. Aravind, a startup founder from Bengaluru, sold a flat in FY 2025-26 for ₹85 lakh (purchased in 2017 for ₹45 lakh). The sale was registered with the Sub-Registrar, who reported it to the Income Tax Department under SFT (Specified Financial Transaction) rules. Aravind filed his ITR declaring only business income — capital gains were completely omitted.

⚠ Outcome: Scrutiny notice issued under Section 143(2). LTCG (Long-Term Capital Gains) computed by the Assessing Officer. Penalty under Section 270A invoked for under-reporting.
✅ Lesson: Property registrars report every sale above ₹30 lakh to the IT Department. Capital gains from property — whether short-term or long-term — must be reported in Schedule CG of your ITR. Consult a tax professional for property transactions.

📋 Case Study 3 — NRI Scenario: NRO Account Interest Overlooked

Background: Mr. Suresh, an NRI (Non-Resident Indian) based in the UAE, holds both an NRE (Non-Resident External) and an NRO (Non-Resident Ordinary) account in India. His NRO account earned ₹1.2 lakh and his NRE account earned ₹80,000 in FY 2025-26. He filed his ITR declaring NIL income from India, believing both accounts to be exempt.

⚠ Outcome: AIS reflected ₹1.2 lakh NRO interest (with TDS deducted at 30% by bank). ITR showed NIL income — classic mismatch. Notice issued for non-disclosure. NRE interest is exempt under Section 10(4); NRO interest is taxable in India even for NRIs.
✅ Lesson: NRIs with Indian-source income exceeding the basic exemption limit must file Indian ITR. NRO interest is always taxable. Refer to www.incometax.gov.in for NRI filing guidance.

8. How to Access AIS and Submit Feedback — Step by Step

1
Visit www.incometax.gov.in → Login with PAN and Password (or Aadhaar OTP)
↓
2
On the dashboard, click “Services” from the top navigation menu
↓
3
Select “Annual Information Statement (AIS)” — opens in a new browser tab
↓
4
Select Financial Year: FY 2025-26 to view data relevant for AY 2026-27
↓
5
Download AIS PDF and TIS PDF → verify each transaction category against your records
↓
6
For incorrect entries: Click the transaction → Select “Feedback” → Choose the appropriate option → Submit

Feedback Options Available in AIS

Feedback Option When to Use It
Information is correct AIS entry accurately reflects your transaction — no action needed
Information is not fully correct Amount in AIS is partially wrong — provide the correct figure
Information relates to other PAN / year Entry belongs to someone else or to a different financial year
Information is duplicate Same transaction appears twice in AIS
Information is denied You completely deny having undertaken this transaction
Information is not taxable Transaction is reflected but is not a taxable event (e.g., loan receipt, principal repayment, own account transfer)
📌 Important Note
Submitting feedback in AIS does not automatically update your ITR. After submitting feedback, you must still file / revise your ITR based on actual correct figures. The feedback updates the “Modified Value” in AIS / TIS, which the department references during return processing.

Is Every AIS Entry Taxable? — Know Before You Panic

AIS Entry Taxable? What You Should Do
Purchase of shares / MF units Not directly Not income itself — taxable event arises only on sale. Track cost of acquisition carefully.
Sale / Redemption of shares or MF units Yes — Capital Gains Compute STCG or LTCG and report in Schedule CG of ITR
Bank cash deposit Depends on source If from disclosed income / savings — not taxable. If from unreported income — taxable.
Transfer between own accounts Not taxable Submit AIS feedback — “Information is not taxable”
Loan received (personal / home loan) Not taxable Submit AIS feedback — “Information is not taxable”
FD maturity proceeds Partially Only the interest component is taxable. Principal repayment is not income.
NRE account interest (for NRIs) Exempt — Section 10(4) Exempt for NRIs maintaining valid NRI status under FEMA. NRO interest is taxable.

9. Pre-Filing Checklist — Tick Every Box Before You Hit Submit

✅ Downloaded AIS for FY 2025-26 from www.incometax.gov.in
✅ Downloaded TIS for FY 2025-26
✅ Downloaded Form 26AS for FY 2025-26
✅ Obtained Form 16 (Part A + Part B) from employer
✅ Collected Annual Interest Certificates from all banks
✅ Obtained Dividend Statement from Mutual Funds and Demat account
✅ Obtained Capital Gains Statement (P&L) from broker
✅ Verified all TDS entries in Form 26AS match my records
✅ Included all interest income under “Income from Other Sources”
✅ Included all dividend income in ITR
✅ Computed STCG and LTCG separately and reported in Schedule CG
✅ Reconciled all high-value transactions (property, cash deposits, LRS remittances)
✅ Submitted AIS feedback for any incorrect / duplicate entries
✅ Chosen correct ITR form (ITR-1 / ITR-2 / ITR-3) based on income types
✅ Compared Old vs New Tax Regime mathematically before selecting one

Common Mistakes to Avoid ❌

❌ Filing ITR without downloading and reviewing AIS
❌ Ignoring small FD or savings bank interest (even ₹500 in AIS can trigger automated matching)
❌ Claiming TDS amounts higher than what Form 26AS reflects
❌ Treating dividends as tax-free (post Finance Act 2020, dividends are fully taxable)
❌ Omitting capital gains from shares or mutual fund transactions
❌ NRIs not disclosing NRO account interest income which is taxable in India

Frequently Asked Questions (FAQs)

Q. Is it mandatory to check AIS before filing ITR?
There is no legal mandate, but it is strongly recommended by both the Income Tax Department and tax professionals. Since your ITR is automatically matched against AIS data after filing, reconciling beforehand dramatically reduces the risk of mismatch notices and refund delays.
Q. AIS contains errors — should I still file ITR based on AIS?
No. File your ITR based on your actual correct records — bank statements, broker P&L, Form 16 etc. Simultaneously, submit feedback for incorrect AIS entries. The department will consider your feedback and the modified TIS values during processing.
Q. Will every AIS vs ITR difference result in a notice?
Not necessarily. Minor or explainable differences may not trigger formal proceedings. However, significant income underreporting is likely to trigger automated adjustment under Section 143(1)(a) or even scrutiny selection under Section 143(2).
Q. I received an e-campaign email about AIS mismatch. What should I do?
Do not ignore it. Login → Compliance Portal → Check specific mismatch → Either file a revised ITR if income was underreported, or explain / submit AIS feedback if the entry is wrong. Respond within the timelines mentioned. Ignoring e-campaign communications can escalate to formal notices.
Q. How far back can the department scrutinize based on AIS data?
Generally, assessment can be reopened up to 3 years from the end of the relevant assessment year. This extends to 10 years if income escaping assessment exceeds ₹50 lakh. Reference: Section 149 as amended by Finance Act, 2021 (effective 1 April 2021).
Q. Which is more important — AIS or Form 26AS?
Both are important for different reasons. AIS = reconcile income. Form 26AS = verify TDS (Tax Deducted at Source) credits. Use both together before filing for a complete and accurate return.
Q. As an NRI, do I need to check AIS if I have income in India?
Absolutely. NRO interest, rental income, and capital gains from Indian assets all appear in AIS. NRIs whose Indian income exceeds the basic exemption limit must file an Indian ITR. Refer to www.incometax.gov.in for NRI-specific guidance.

📎 Authorised Government References

Resource Link What You Can Do There
Income Tax Portal (e-filing) www.incometax.gov.in File ITR, access AIS, download Form 26AS, pay taxes, submit feedback
TRACES Portal www.tdscpc.gov.in Verify TDS credits, request Form 16 / 16A, track TDS deposits
CBDT Circulars & Notifications www.incometaxindia.gov.in CBDT (Central Board of Direct Taxes) circulars, press releases, tax law updates
GST Portal www.gst.gov.in GST (Goods and Services Tax) returns; GST turnover data also appears in AIS for businesses

Final Thoughts: Reconcile First. File with Confidence.

India’s tax ecosystem has undergone a silent revolution. With AIS now capturing 50+ types of financial transactions — from your savings bank interest to your foreign remittances — the Income Tax Department often knows more about your financial year than you remember at filing time.

The AIS is not your enemy. It is your pre-filing advisor, your early warning system, and your opportunity to get things right before the system flags a mismatch. The smartest taxpayers follow one simple rule:

📋 Download AIS → Reconcile → Then File. Not the other way around.

15 minutes of AIS review can save months of stress, notice responses, tax demands, and refund delays. That’s not just good tax practice — that’s good financial sense.

⚠ Disclaimer: This article is prepared for educational purposes only and reflects provisions applicable for FY 2025-26 (AY 2026-27). The law has been verified against the Income-tax Act, 1961 as amended up to the Finance (No.2) Act, 2024, CBDT (Central Board of Direct Taxes) circulars and notifications available as of June 2026. Tax laws are subject to frequent amendments, judicial pronouncements, and departmental clarifications. This article does not constitute legal or tax advice. Readers are strongly advised to consult a qualified tax professional before making any tax-related decisions. Tax & Finance Hub shall not be liable for any loss arising from reliance on this article.

Abhilash Das

Abhilash
Finance Professional | Founder, Tax & Finance Hub

Abhilash Das is a finance professional with over a decade of practical experience in direct taxation, indirect taxation, and corporate finance. Through Tax & Finance Hub, this is his humble attempt to simplify taxation, finance, and compliance for individuals, startups, NRIs, and businesses — one article at a time. The goal is simple: make tax less scary and more understandable for every Indian.