Reconciling Form 26AS and AIS Before You File

Form 26AS, available through the TRACES portal, now shows reported tax deducted at source, or TDS, and tax collected at source, or TCS. AIS, the Annual Information Statement, gives a broader view of information reported about you, including income and certain financial transactions. Their coverage differs, so their totals need not match.

An AIS transaction value is not automatically taxable income. A reported sale, investment or other transaction needs to be understood before deciding its tax treatment. Equally, income does not become non-taxable merely because it is absent from a statement; the department expects taxpayers to check all related information and report complete and accurate information in the return.

Start with statements for the correct taxpayer and financial year. Keep dated working copies so you can identify what changed if you download updated statements later. Prepare your supporting records before investigating individual differences.

• ✓Form 26AS and AIS for the year being reconciled.
• ✓TDS certificates received from customers, banks and other deductors.
• ✓Sales, income and TDS receivable ledgers, with invoices and credit notes.
• ✓Bank statements and interest certificates, including accounts outside your main business bank.
• ✓Relevant investment, property and other transaction records.
• ✓Previous reconciliation notes explaining differences carried into this year.

Use the income-tax pre-filing document checklist to organise the wider filing pack. Complete your bank reconciliation alongside this exercise so unexplained receipts have supporting records before the return is prepared.

Use a reconciliation sheet with one row for each identifiable income stream or transaction. Record the party, reference, amount in your books, amount reported in each statement, TDS amount, explanation and next action. Keep income and tax-credit columns separate.

1. Match the party first. Check the deductor details and supporting certificate rather than relying only on a shortened name.
2. Identify the underlying income. Trace the reported amount to invoices, interest records or other documents.
3. Compare like with like. Establish whether each amount represents an invoice, a payment, a gross amount or a net receipt.
4. Match TDS separately. Compare your TDS receivable ledger, certificates and Form 26AS without adding the deduction to income again.
5. Explain differences. Record timing, grouping, corrections or errors with evidence.
6. Review the return treatment. Ask your CA to confirm income recognition and credit eligibility where reporting and accounting periods differ.

Illustrative example only: a service invoice records income of Rs 50,000, with no GST component in this example. The customer pays Rs 45,000 and separately deducts Rs 5,000 as TDS. Reconcile the Rs 50,000 income, Rs 45,000 bank receipt and Rs 5,000 deduction as parts of one transaction. These figures illustrate the matching method, not a prescribed TDS rate or confirmation that a credit is available.

Keep a difference open until you have an explanation and a filing decision. An email asking for correction is useful evidence of follow-up, but it does not establish the correct tax treatment by itself. Give each unresolved item a named person responsible and a clear next action.

AIS provides a way to submit feedback on reported information. Review the available options against your evidence and select the one that describes the issue accurately. Check the current portal guidance because the options and processing steps may change.

1. Identify the exact entry and reporting source.
2. Check whether it is incorrect, duplicated, partly correct or simply unfamiliar.
3. Gather the documents supporting your explanation.
4. Submit the applicable feedback and retain the acknowledgement.
5. Contact the reporting party where its underlying records need investigation.
6. Review subsequent statement changes and keep the unresolved position in your filing notes.

• Comparing only annual totals and missing individual errors.
• Treating every AIS value as income without checking what it represents.
• Recording a net bank receipt as the entire income when a deduction explains the balance.
• Counting the same income again because it appears in more than one statement.
• Changing correct books solely to make a portal total agree.
• Treating feedback submission or a correction request as proof that the issue is resolved.
• Ignoring income outside the main business ledger, such as separately held bank accounts.

Avoid using an unexplained balancing entry to close the reconciliation. It removes the visible difference while leaving the underlying question unanswered. A documented open item is more useful than an unsupported adjustment.

• ✓Each material reported entry has been traced to supporting records.
• ✓Income and TDS have been reconciled separately.
• ✓Missing, duplicate and incorrect entries have a documented explanation.
• ✓Correction requests and AIS feedback acknowledgements are retained.
• ✓Your CA has reviewed unresolved items and the proposed return treatment.
• ✓The final working sheet identifies the statement versions used.

This exercise supports return preparation; it does not decide every question about taxable income or tax credit. Where ownership, classification, timing or eligibility is disputed, obtain advice before filing. Check the official income-tax portal or your CA for current requirements and available correction routes.