Your AIS Doesn't Match Form 26AS? Fix It Before the Taxman Notices

A record filing season is over. The reconciliation season has just begun#

The Income Tax Department closed August with a number it was happy to publicise: more than 7.8 crore returns filed for assessment year 2026-27 by 31 August, of which over 5.9 crore came in by the 31 July cut-off for salaried filers using ITR-1 and ITR-2. Impressive throughput. It also means several crore taxpayers have handed the department numbers that a computer will now compare, line by line, against what banks, employers, fund houses and sub-registrars reported about them.

That comparison is where the trouble starts. Two statements sit on the e-filing portal under your PAN, the Annual Information Statement (AIS) and Form 26AS, and they are built differently, updated on different schedules, and quite often disagree. If you are among the businesspeople and professionals still to file (audit cases run to 31 October), or you missed the date and are heading for a belated return, or you have filed and are now reading a "high value transaction" email with mild panic, the mismatch is yours to close before the department closes it for you.

One calendar quirk this year. The Income-tax Act, 2025 came into force on 1 April 2026, but the department has clarified that returns for AY 2026-27 are still filed under the old 1961 Act, with the new "tax year" concept starting from FY 2026-27. The section numbers below govern the return in front of you.

Two statements, one PAN: what AIS and Form 26AS actually are#

Form 26AS is the older document. It exists because of section 285BB of the Income-tax Act read with Rule 114-I, which requires the Directorate of Income-tax (Systems) to upload an annual information statement in Form 26AS within three months from the end of the month in which the information is received. It was once a catch-all. It no longer is. The department's own FAQs state that from AY 2023-24, Form 26AS on the TRACES portal displays only TDS and TCS data.

The AIS took over the wider job. Part A carries your identity details. Part B carries TDS and TCS entries, Statement of Financial Transactions (SFT) data, tax payments, demands and refunds, and other information such as salary breakdowns and foreign remittances. Alongside it sits the Taxpayer Information Summary (TIS), a category-wise aggregation that shows a processed value and a derived value. The derived value is what feeds the pre-filled fields in your return.

Some vocabulary, since the portal assumes you know it. TDS is tax your payer cuts before paying you. SFT is a report a bank, fund house or registrar files about a transaction you made, whether or not tax was deducted on it. The derived value is what the system thinks your income is after your feedback has been applied.

Why the two statements disagree in the first place#

Most mismatches are mechanical rather than sinister, and the biggest single cause is the calendar. Deductors file quarterly TDS statements, and the fourth-quarter statement is due on 31 May, with Form 16 to follow by 15 June. Reporting entities file their SFT in Form 61A by 31 May as well. A Form 26AS downloaded in April is a half-written document, and an AIS pulled in early June may already have moved by the time you file.

Deductor error accounts for much of the rest. A PAN quoted with one wrong character, a payment tagged to the wrong assessment year, a challan that failed validation: each produces a credit that exists somewhere in the system but not against you. The department's guidance here is blunt. Inform the employer or deductor responsible for the deduction, and validate the challan number and PAN.

Then there are the reporting thresholds, which catch a great deal of ordinary life. Under Rule 114E, banks report cash deposits aggregating ₹10 lakh or more in savings accounts, time deposits of ₹10 lakh or more, and credit card payments of ₹1 lakh in cash or ₹10 lakh by other modes. Mutual funds report ₹10 lakh or more received for units, and registrars report property transactions of ₹30 lakh or more. A joint account, a rolled-over deposit or a switch between fund schemes can look like fresh money to the entity doing the reporting.

The gross-versus-net problem frightens people most. SFT entries show sale consideration, not gain. A ₹12 lakh mutual fund redemption in your AIS is not ₹12 lakh of income, and a joint fixed deposit may appear in full against the first holder even when the interest is genuinely split.

CA (Dr.) Suresh Surana put the point plainly in May. Taxpayers "should not treat the Annual Information Statement (AIS) as the sole basis for filing their Income Tax Return (ITR), as the information reflected therein may at times be incomplete, duplicated, or subject to reporting errors," he told Business Today. That cuts both ways. The AIS is not gospel, and it is not optional either.

The reconciliation drill, step by step#

Do this before you press submit, because doing it afterwards costs money.

1. Download fresh copies on the same day. Log in to the e-filing portal and pull the AIS, available in PDF, JSON and CSV, along with Form 26AS. Working from a June download in September is how errors survive.
2. Start with the TIS, not the AIS. The TIS derived value is what the portal pre-fills. If that number is wrong, your return is wrong before you have typed anything.
3. Reconcile TDS first, against Form 26AS. Your credit claim is matched against Form 26AS, not the AIS. Where the two differ on a TDS figure, Form 26AS governs the credit and the AIS is your diagnostic.
4. Reconcile income next, against your own records: bank statements, interest certificates, contract notes, rent receipts, Form 16 and Form 16A. Your books are the primary evidence. The AIS is a third party's view of them.
5. Classify every gap. Is the entry wrong, duplicated, someone else's, or correct but unreported by you? The answer decides your next move.

Feedback, corrected TDS return, or Form 71: picking the right lever#

Three different faults call for three different tools, and using the wrong one wastes weeks.

Where the AIS entry itself is wrong, the feedback facility is the route. The department's offline utility guidance lists the options as "Information is correct", "Information is not fully correct", "Information relates to other PAN/Year", "Information is duplicate /included in other information", "Information is denied", and "Customized Feedback", which carries category-specific choices such as "Income is not taxable". Submitting feedback produces a modified value beside the reported value, an acknowledgement receipt, and confirmation by email and SMS. Since May 2024 you can also track what happens next, because the AIS shows whether your feedback was shared with the source, when, and whether the source accepted, partially accepted or rejected it. Feedback is a representation, not a magic eraser, so denying a genuine transaction because it is inconvenient is a poor idea.

Where the TDS entry is wrong, feedback will not fix it. Only the deductor can, by filing a correction statement. Chase the employer, bank or tenant, and keep the correspondence.

Where the TDS relates to income you already declared in an earlier year, there is a remedy most filers have never heard of. Section 155(20), operationalised through Rule 134 and Form 71 by Notification No. 73/2023 dated 30 August 2023, lets you claim the TDS credit in the year the income was offered to tax rather than losing it because the deductor withheld tax later. The window is two years from the end of the financial year in which the tax was deducted, and the form is filed electronically with a digital signature or an electronic verification code. Freelancers and consultants who bill on accrual and get paid late are exactly who this was written for.

Already filed, or missed the date? What is still open#

The department does not wait for you to notice. In December 2024 the CBDT launched an electronic campaign under the e-Verification Scheme, 2021, sending SMS and email to taxpayers whose AIS did not agree with their filed returns and pointing them to the portal to respond or revise. A year later, emails flagging cash deposits, mutual fund transactions and property deals went out again. Tax professionals quoted at the time described them as nudges rather than demands, and advised revising within the December deadline rather than letting matters escalate.

Your options, in ascending order of cost:

A revised return under section 139(5) carries no penalty. If you have already filed and then find an omission, this is the cheap fix, and you have longer than you may think. Budget 2026 stretched the revision window to twelve months from the end of the tax year, so for AY 2026-27 a revised return can be filed before 31 March 2027, or before the assessment is completed, whichever comes first. One useful side effect: someone who files a belated return in late December can still revise it, which the old nine-month rule made impossible.

A belated return under section 139(4) is for those who missed 31 July, or 31 August in the case of non-audit business and professional filers. The door stays open until 31 December 2026, with a section 234F fee of ₹1,000 where total income does not exceed ₹5 lakh and ₹5,000 otherwise, plus interest on unpaid tax. You also lose the right to carry forward most losses.

An updated return under section 139(8A) is what remains after December. The Finance Act 2025 stretched the window from 24 months to 48, but the additional tax climbs steeply: 25 per cent in year one, 50 per cent in year two, 60 per cent in year three and 70 per cent in year four. It cannot be used to increase a refund or a loss.

Put crudely, fixing a mismatch this month costs you an evening, and fixing the same mismatch in 2028 costs 60 per cent on top of the tax.

Key takeaways#

1. Form 26AS and the AIS are not two versions of one document. Since AY 2023-24 Form 26AS carries only TDS and TCS, while the AIS carries the wider financial picture, and it is the TIS derived value that pre-fills your return.
2. Claim TDS credit against Form 26AS. Use the AIS to explain income, spot missing entries and work out why the two disagree.
3. Most mismatches are timing or reporting artefacts. Fourth-quarter TDS statements and SFT filings are due only on 31 May, and SFT entries often show gross consideration rather than taxable gain.
4. Match the tool to the fault: AIS feedback for wrong AIS data, a deductor correction statement for wrong TDS, and Form 71 for TDS on income you declared in an earlier year.
5. The correction window narrows and gets dearer with time. A belated return for AY 2026-27 closes on 31 December 2026 and a revised return on 31 March 2027, after which only an ITR-U remains, at 25 to 70 per cent additional tax.

Frequently asked questions#

Which statement should I trust if the two disagree? Neither, unconditionally. Trust your own records: bank statements, interest certificates, contract notes and Form 16. Use Form 26AS to support your TDS credit claim, and the AIS to check whether anything is missing from your income disclosure.

Will AIS feedback change my Form 26AS? No. AIS feedback updates the AIS and the TIS. Form 26AS reflects what deductors and collectors have filed, so only a corrected TDS statement from the deductor will change it.

My AIS shows a mutual fund redemption of ₹12 lakh. Do I owe tax on ₹12 lakh? No. That figure is sale consideration reported under the SFT rules, not gain. You report the capital gain computed from cost, holding period and sale value, and you keep the broker or registrar statement that supports the computation.

A joint fixed deposit shows entirely against my PAN. What do I do? Submit AIS feedback selecting "Information relates to other PAN/Year", give the co-holder's details, and declare your actual share of the interest. Keep the bank's interest certificate.

Can I simply ignore an entry I believe is wrong? You can file without acting on it, but the mismatch stays visible to the department's systems and can resurface as an e-campaign message or a notice. Recording feedback creates a dated, documented position instead.

What if the reporting source rejects my feedback? The AIS shows the source's response and the date it was given. If a source rejects a correction you believe is right, gather documentary evidence, raise a grievance on the portal, and take professional advice before filing.

I am a freelancer. My client deducted TDS in FY 2025-26 for an invoice I declared in FY 2024-25. Is that credit lost? Not necessarily. Form 71 under section 155(20) exists for precisely this situation, and it can be filed within two years from the end of the financial year in which the tax was deducted.

Glossary#

AIS (Annual Information Statement). The comprehensive statement of information the department holds about a taxpayer, viewable and disputable on the e-filing portal.

Form 26AS. The annual tax statement under section 285BB and Rule 114-I. Since AY 2023-24 it shows TDS and TCS data only.

TIS (Taxpayer Information Summary). A category-wise summary of the AIS showing a processed value and a derived value. The derived value pre-fills your return.

SFT (Statement of Financial Transactions). The report banks, fund houses, registrars and card issuers file in Form 61A about the high-value transactions specified in Rule 114E.

TDS and TCS. Tax deducted at source by a payer, and tax collected at source by a seller, on your behalf.

Derived value. The AIS figure after taxpayer feedback and de-duplication have been applied.

Belated return. A return filed after the due date under section 139(4), attracting a fee under section 234F.

ITR-U (updated return). A return filed under section 139(8A) up to 48 months after the assessment year, with additional tax of 25 to 70 per cent.

This article explains tax procedure and cites the rules as they stand for AY 2026-27. It is general information rather than tax advice, and it does not address any individual's facts. Where a mismatch involves large sums, disputed ownership or an assessment already under way, a qualified chartered accountant is worth the fee.

References#

1. Income Tax Department, Annual Information Statement (AIS): user guide
2. Income Tax Department, FAQs on AIS
3. Income Tax Department, Steps to submit AIS feedback (offline)
4. Income Tax Department, Rule 114-I, Income-tax Rules, 1962: Annual Information Statement
5. Income Tax Department, Rule 114E, Income-tax Rules, 1962: Statement of Financial Transactions
6. Income Tax Department, Tax Credit Mismatch FAQs
7. Income Tax Department, Income Tax Returns FAQs: belated, revised and updated returns, and section 234F fees
8. Income Tax Department, Objective and scope of the Income-tax Act, 2025
9. Press Information Bureau, CBDT releases new functionality in AIS for taxpayers to display status of information confirmation process in real-time, 13 May 2024
10. Press Information Bureau, CBDT launches Electronic Campaign to address income and transaction mismatches for FY 2023-24 and FY 2021-22, 17 December 2024
11. Taxmann, CBDT notifies Form 71 to allow TDS credit in respect of income disclosed in ITR filed in earlier years, Notification No. 73/2023 dated 30 August 2023
12. Taxmann, ITR-U 48-month window under section 139(8A)
13. Business Standard, ITR filing for AY27 touches record 78 million till August 31, 1 September 2026
14. Business Today, Can salary, FD or capital gains mismatches in AIS trigger tax notices?, 27 May 2026
15. Business Standard, Income Tax dept emails flag cash deposits, property deals: what to do, 17 December 2025
16. ClearTax, ITR filing last date for FY 2025-26 (AY 2026-27), including the 31 October audit-case due date