Managing your taxes can be a complex process, especially when there are discrepancies in your Annual Information Statement (AIS). Whether it’s rental income that you haven’t received or property sales you were never a part of, these errors can lead to complications in your tax returns. Here’s a comprehensive guide on how to deny such incorrect income figures in your AIS and save yourself from potential tax troubles.
Background: Many tax-payers have reported certain income not belonging to them but visible in their annual Information Statement (AIS). We have seen cases where rental income is shown for a year but person has not rented out house property that year. The earlier tenants just claimed HRA exemption, using PAN of the landlord even in the subsequent years.
Another example can be sale proceeds of property in AIS even though the tax-payer was just added as a name-sake second name.
Consequences of Ignoring Incorrect Information
Ignoring these discrepancies can lead to a host of issues such as:
i. Proposal for Adjustment in Summary Assessment: The income tax department may make adjustments to your taxable income based on the AIS, even if the information is incorrect.
ii. Notices for Limited Scrutiny: You might receive notices from the tax department about mismatches between your tax return and AIS.
Steps to Deny Incorrect Information
1. First log into your income tax account and then select the option for AIS in services tab as follows:
2. On next page, Select the AIS tab as follows:
3. Both AIS and TIS tabs are visible. Select the AIS tab:
4. Then you have to make three selections on the same page:
4.1 Select the financial year.
4.2 Select the tab under which information has been selected – Is it Information under TDS/ TCS or under SFT information? Or other tabs?
4.3 Select the particular information which is wrong:
5. Once information has been selected, select the tab – Optional:
6. Then select the feedback. We have discussed the feedback with possible scenarios as follows:
|
Feedback |
Possible Scenario(s) |
| Information is correct | Tax payer accepts the information. Self explanatory |
| Receipt in nature of reimbursement of expenses | Nature of 194R TDS. Or where deductor has deducted TDS on invoice as well as debit note, out of caution |
| Receipt is not taxable | Tax payer claims income as not taxable. Self explanatory |
| Receipt is in nature of refundable deposit | Deductor deducts TDS even out of deposit, out of caution. Or where there are differences in classification. |
| Receipt treated as capital receipt | Self explanatory where capital receipts are claimed as not taxable. |
| Information is not fully correct | Here you deny the AIS information partially. |
| Information relates to other PAN/ year | Sometimes name is just added as second holder in immovable properties for possession purposes without any contribution. In case such property is sold, the income is to be taxed in name of first holder/ actual contributor/ owner.
This is a very important provision since the amounts involved in immovable properties are huge. |
| Information is duplicate/ included in other information | Self-explanatory. Where income is counted as duplicate. |
| Information is denied | Information is denied completely. This should be counted as
|
Conclusion: Correcting discrepancies in your Annual Information Statement is crucial for accurate tax filing and avoiding penalties or notices. The process, although straightforward, requires your attention to detail. Taking active steps to deny incorrect information can save you from unnecessary financial and legal complications. For more specific advice, consider consulting a tax professional.
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We hope you find the information provided above useful. If you have any queries, please don’t hesitate to email us at [email protected].
— Direct Tax Team, Entrecap Business Services
Disclaimer: The information presented above addresses a general topic and is intended for informational purposes only. It should not be considered as actionable legal or professional advice. We recommend consulting with qualified professionals for specific advice tailored to your situation. Entrecap Business Services and its Direct Tax Team are not responsible for any actions taken based on the information provided in this article.
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