Annual Information Statement (AIS) System in India

(A) Introduction on AIS System

(i) Now CBDT has introduced new AIS system by replacing of existing 26AS statement commencing from year ending March 31, 2021 and onward

(ii) Existing 26AS statement is continuing in operation till new AIS system is 100% in operation.

(iii) New AIS system will provide the comprehensive information’s relating to 50 and more financial transactions year wise as significantly useful at the time of preparing the Income tax return by the taxpayer

(iv) New AIS system will provide the information’s after removing duplicate and wrong information’s.

(v) The taxpayers can download such information’s in PDF, JSON, CSV formats.

(vi) The taxpayer is permitted to submit online feedback where the information’s are erroneous or refers to another person or year or is duplicate.

(vii) Role of CBDT

(a) CBDT is monitoring AIS through Computerized Processing Centre (CPC) as existed at Bangalore.

(b) CBDT is collecting information’s from Statement of Financial Transactions SFT- 61A and quarterly and monthly TDS returns.

(B) List of financial transactions and source of information’s for AIS

1. Under the head Salaries (Section 15 to 17)

(i) Through deductors (employer) of TDS those are required to provide breakup of all payments made to the deductees (employee) under head salaries, perquisites, profits in lieu of salary etc. in Part B (Annexure) of Form 16 and to issue form no. 16 quarterly to the deductees (employees) from the TRACE.

(ii) Through deductors (employers) of TDS those are also required to file Annexure II of the TDS statement (return) 24Q quarterly along with the last quarter statement as on March 31^st every year with the TRACE

2. Under the head Income from House Property (Section 22 to 27)

(i) Through deductors (Tenants) those are required to deduct TDS against the payments to deductees (landlords) where tenants are making payments under the head rent on house property exceeding Rs. 5 lac in a financial year.

(ii) Through tenants (Individuals/HUFs) those are required to file quarterly return in Form 26Q with the TRACE against the income from house property.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against the TDS deducted and deposited.

• Under the head Income from Other Sources (Section 56 to 59)

3. Under the head Dividends

(i) Through dividend paying corporates (deductors) those are required to file a form SFT – 61A quarterly with the CPC Bangalore against the distribution of dividend to the shareholders.

(iii) Through deductors those are required to file a quarterly return in Form no. 26Q with the TRACE against the distribution of dividend to the shareholders

(iii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against the TDS deducted and deposited.

4. Under the head Interest on saving bank accounts

(i) Through Interest paying banks and post offices (deductor) those are required to file a From SFT-61A quarterly with the CPC Bangalore.

(ii) Deductors are not required to file quarterly return of TDS as deductors are not required for TDS under the head Interest on saving bank accounts.

5. Under the head Interest on term deposits/fixed deposits with banks

(i) Through Interest paying banks (deductor) those are required to file a quarterly return in Form no. 26Q with the TRACE against Interest on saving bank accounts

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

6. Under the head Interest with non banks (others)

(i) Through interest paying non banks/others (deductor) those are required to file a Form SFT-61A quarterly with the CPC, Bangalore.

(ii) Through deductors those are required to file a quarterly return in Form no. 26Q with the TRACE against interest with non banks.

(iii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against the TDS deducted and deposited.

7. Interest from income tax refund

(i) CPC is providing details of interest paid or Income tax refund in a financial year which is taxable under the head Income from other sources.

(ii) Hence SFT-61A and TDS return is not required to be filed separately by the CPC.

8. Rent on plant and machinery

(i) Through tenants (deductee) those are also required to file a quarterly return in Form no. 26Q with the TRACE against rent on plant and machinery.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

9. Winnings from lottery or crossword puzzle

(i) Through deductors those are required to file a quarterly return in Form no. 26Q with the TRACE against winning from lottery or crossword puzzle.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

10. Winnings from horse race

(i) Through deductors those are also required to file a quarterly return in Form no. 26Q with the TRACE against payments for winnings from horse race.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

11. Receipt of accumulated balance of PF from employer – Section 111

(i) Through deductors those are required to file a quarterly return in Form no. 26Q with the TRACE against receipt of accumulated balance of PF from employer

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE quarterly to the deductees against TDS deducted and deposited.

12. Interest from infrastructure debt fund

(i) Through deductors those are required to file a quarterly return in Form no. 27Q with the TRACE against Interest from Infrastructure debt fund

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

13. Interest from specified company by a non-resident – Section 115A(1) (a)(iiaa)

(i) Through deductors those are required to file a quarterly return in Form no. 27Q with the TRACE against interest from specified company by a non-resident.

(ii) Through deductor those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

14. Interest on bonds and government securities

(i) Through deductors those are required to file a quarterly return in Form no. 27Q with the TRACE against interest on bonds and government securities.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

15. Income in respect of units of non-resident – Section 115A(1)(a)(iiab)

(i) Through deductors those are required to file a quarterly return in Form no. 27Q with the TRACE against income in respect of units of non-resident.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

16. Income and long-term capital gain from units by an offshore fund – Section 115AB(1)(b)

(i) Through deductors those are required to file a quarterly return in Form no. 27Q with the TRACE against income and long-term capital gain from units by an offshore fund.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited

17. Income and long-term capital gain from foreign currency bonds or shares of Indian companies – Section 115AC

(i) Through deductors those are required to file a quarterly return in Form no. 27Q with the TRACE against income and long-term capital gain from foreign currency bonds or shares of Indian companies

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

18. Income of foreign institutional investors from securities – Section 115AD(1)(i)

(i) Through deductors those are required to file a quarterly return in Form no. 27Q with the TRACE against Income of foreign institutional investors from securities.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

19. Insurance commission

(i) Through deductors those are required to file a quarterly return in Form no. 26Q with the TRACE against insurance commission.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

20. Receipts from life insurance policy – Section 194DA

(i) Through deductors those are required to file a quarterly return in Form no. 26Q with the TRACE against receipts from life insurance policy.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

(iii) However most of life insurance policies are exempted under section 10 (10D) subject to satisfactions of certain conditions. Hence no TDS is required to be deducted by insurance company where certain conditions of section 10(10D) are satisfied.

21. Withdrawal of deposits under national savings scheme

(i) Through deductors those are required to file a quarterly return in Form no. 26Q with the TRACE against withdrawal of deposits under national savings scheme.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

22. Receipt of commission etc. on sale of lottery tickets- Section 194G

(i) Through deductors those are required to file a quarterly return in Form no. 26Q with the TRACE against receipt of commission etc. on sale of lottery tickets

(ii) Through deductors are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

23. Income from investment in securitization trust

(i) Through deductors those are required to file a quarterly return in Form no. 27Q with the TRACE against income from investment in securitization trust.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

24. Income on account of repurchase of units by MF/UTI – Section 194F

(i) Through deductors those are required to file a quarterly return in Form no. 26Q with the TRACE against income on account of repurchase of units by MF/UTI.

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

25. Interest or dividend or other sums payable to government

(i) Through deductors those are required to file a quarterly return in Form no. 26Q with the TRACE against Interest or dividend or other sums payable to government

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

• Under the head miscellaneous financial transactions

26. Payment to non-resident sportsmen or sports association – Section 115BBA

(i) Through deductors those are required to file a quarterly return in Form no. 27Q with the TRACE against payment to non-resident sportsmen or sports association

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

27. Sale of land or building

(i) Through deductors those are required to file a return in Form no. 26QB with the TRACE where sales considerations is exceeding Rs. 50 lacs

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

(iii) Through registrars those are required to file SFT-61A quarterly with the CPC, Bangalore for sales considerations of all immovable property transferred by him.

(iv) Through registrars those are also required to file SFT-61 quarterly with the CPC, Bangalore where PAN is not provided by the seller and buyer (both).

28. Receipts from transfer of immovable property

(i) Through deductors those are required to file one time TDS return in Form no. 26QB with the TRACE against receipts from transfer of immovable property.

(ii) Through deductors those are also required to issue Form no. 16B one time from the TRACE to the deductees against TDS deducted and deposited.

29. Sale of vehicle

• Through regional Transport Offices (RTO) those required to file SFT-61 quarterly with the CPC, Bangalore where PAN are not furnished by seller and buyer (both).

30. Sale of securities and units of mutual fund

(i) Through depositories like NSDL and CDSL those are required to file a Form SFT-61A quarterly with the CPC, Bangalore against the estimated sales considerations against the debit transactions.

(ii) Tax payers are permitted to modify the estimated sales considerations as reported by depository before filling of his Income tax return.

31. Off market debit transactions

(i) Through depositories like NSDL and CDSL those are required to file a Form SFT-61A quarterly with the CPC, Bangalore against the estimated sales considerations relating to debit off market transactions.

(ii) Tax payers are permitted to modify the estimated sales considerations relating to debit off market transactions as reported by depository before filling of his Income tax return.

32. Off market credit transactions

(i) Through depositories like NSDL and CDSL those are required to file a Form SFT-61A quarterly with the CPC, Bangalore against the estimated purchase considerations relating to credit off market transactions.

(ii) Tax payers are permitted to modify the estimated purchase considerations relating to credit off market transactions as reported by depository before filling of his Income tax return.

33. Business receipts

(i) Through deductors (contractor) those are required to file a quarterly return in Form no. 26Q with the TRACE against business receipts

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees (contractee) against TDS deducted and deposited

34. Business expenses

(i) Through tax collectors those are required to file a quarterly return in Form no. 27EQ with the TRACE against business expenses.

(ii) Through tax collectors those are also required to issue Form no. 27D quarterly to the tax collectees against TCS collected and deposited relating to purchase of alcoholic liquor

(iii) Tax collectors are not required to file SFT-61A quarterly as tax collectors are required to collect TCS under the head business expenses

35. Rent payments

(i) Through deductors those are required to file a quarterly return in Form no. 26QC with the TRACE against rent payments.

(ii) Through deductors those are also required to issue Form no. 16C quarterly from the TRACE to the deductees against TDS deducted and deposited

36. Miscellaneous payments

(i) Through Collectors (Banks) those are required to file a quarterly return in Form no. 26QD with the TRACE for issue of bank draft or pay order by the bank to the taxpayer

(ii) Through banks those are also required to issue Form no. 16D quarterly from the TRACE to the collectees (purchaser) against TCS collected and deposited

(iv) Through Collectors those are also required to file SFT-61 quarterly with the CPC, Bangalore where PAN are not provided by the collectees

37. Cash deposits

(i) Through banks those are required to file Form SFT-61A quarterly with the CPC, Bangalore for receiving cash deposit in any bank account except in current account.

(ii) Through banks those are required to file Form SFT-61A quarterly with the CPC, Bangalore for receiving cash in current account.

(iii) Bank account holders are required to confirm about the cash deposit into his bank account.

38. Cash withdrawals

(i) Through banks those are required to file Form SFT-004 quarterly with the CPC, Bangalore for receiving cash deposit in any bank account except in current account.

(ii) Through banks those are required to file Form SFT-61A quarterly with the CPC, Bangalore for receiving cash in current account.

(iii) Bank account holders are required to confirm about the cash deposit into his bank account.

(iv) Through deductors (banks) those are required to file a quarterly return in Form no. 26Q with the TRACE against deduction of TDS where TDS provisions are applicable on the bank.

(v) Through banks those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited where TDS provisions are applicable on the bank.

39. Cash Payments

(i) Through Taxpayers those are required to file Form SFT-61A quarterly with the CPC, Bangalore for making cash payments against the purchase of goods and services.

(ii) Through Banks those are required to file Form SFT-61A quarterly with the CPC, Bangalore for receiving cash against issue of bank draft or pay orders.

(iii) Through Banks those are required to file SFT-61A quarterly with the CPC, Bangalore for receiving cash in hand against purchase of prepaid instruments.

40. Outward foreign remittance/purchase of foreign currency- Section 206C(1G) and (1G(a))

(i) Through authorized dealers (collectors) those are required to file a quarterly return in Form no. 27EQ with the TRACE against outward foreign remittance under LRS for education (under section 80E of Income tax act 1961) where TCS provisions are applicable on the authorized dealer.

(ii) Through collectors those are required to issue TCS certificate quarterly to the taxpayers against outward foreign remittance under LRS for education and for overseas tour package.

(iv) Through collectors those are required to issue Form no. 16D quarterly from the TRACE to the collectees against TCS collected and deposited.

41. Payments of royalty or fee for Technical services etc.

(i) Through deductors of TDS (under section 195 of Income tax act, 1961) are required to file a quarterly return in Form no. 27Q with the TRACE against payment of royalty or fee for technical service etc as paid to the non residents

(ii) Through deductors those are also required to issue Form no. 16A quarterly from the TRACE to the deductees against TDS deducted and deposited.

(ii) Through authorized dealers those are required to file return in Form 15CC quarterly against the foreign remittances.

42. Foreign travel

(i) Through authorized dealers (collectors) those are required to file a quarterly return in Form no. 27EQ with the TRACE against payments for overseas travel where TCS provisions are applicable.

(ii) Through collectors those are required to issue Form no. 16D quarterly from the TRACE to the collectees against TCS collected and deposited.

(iii) Through collectors those are also required to file SFT-61 quarterly with the CPC, Bangalore where PAN number of collectees are not provided.

43. Purchase of immovable property

(i) Through deductors (purchasers) those are required to file a monthly return cum challan in Form no. 26QB with the TRACE where TDS provisions are applicable.

(ii) Through purchasers those are required to issue Form no. 16A monthly from the TRACE to the deductees (sellers) against TDS deducted and deposited.

(iii) Through property registrars those are required to file SFT-61 quarterly with the CPC, Bangalore where buyer or seller has not provided his PAN number.

44. Purchase of Motor Vehicle

(i) Through collectors (Sellers) of TCS those are required to file a quarterly return in Form no. 27EQ with the TRACE against sale of motor vehicle

(ii) Through sellers those are required to issue Form no. 16D quarterly from the TRACE to the collectees against TCS collected and deposited.

(ii) Through sellers those are required to file SFT-61 quarterly with the CPC, Bangalore where collectees have not provided their PAN.

45. Purchase of Time deposits (Fixed deposits) from banks

• Through banks those are required to file a SFT – 61 quarterly with the CPC, Bangalore where buyers of time deposits have not their PAN.

46. Purchase of securities and units of mutual funds

• Through sellers of securities (including share application money) and units of mutual funds those are required to file a Form no. SFT – 61A quarterly with the CPC, Bangalore against sale of securities and units of mutual funds.

47. Credit/Debit card

• Through credit / debit card issuing entities those are required to file a SFT – 61 quarterly with the CPC, Bangalore where the tax payers have not provided their PAN.

48. Balance in account

• Through banks those are required to file a Form no. SFT – 61A quarterly with the CPC, Bangalore against opening of any new bank account except saving and time deposits accounts.

49. Income distributed by business trust

• Through payers those are required to file a quarterly return in Form no. 27Q with the TRACE against payment of incomes from units of a business trusts where Income tax is chargeable to tax @ special rates.

50. Income distributed by investment fund

(i) Through deductors of TDS those are required to file a quarterly return in Form no. 26Q with the TRACE against payments of incomes as distrusted by the investment funds

(ii) Through deductors those are required to issue Form no. 16A quarterly from the TRACE to the deductee against TDS deducted and deposited.

(Author can be reached at email address [email protected] or on Mobile No. 9811081957)

Disclaimer : The contents of this presentation are solely for informational purpose. Neither this presentation nor the information contained herein constitutes a contract or will form the basis of a contract. The material contained in this presentation does not constitute/substitute professional advice that may be required before acting on any matter. While every care has been taken in the preparation of this presentation to ensure its accuracy at the time of publication, Satish Agarwal assumes no responsibility for any errors which despite all precautions, may be found herein. In no event shall we be liable for direct or indirect or consequential damages, if any, arising out of or in any way connected with the use of this presentation or the information contained herein.