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Income Tax | AY 2026-27 | June 10, 2026
Most people open their ITR form, start filling in numbers, and only check Form 26AS or AIS when they get a mismatch notice. That is the wrong sequence. Both documents should be your starting point, not a last-minute verification. For AY 2026-27, the rules have changed significantly. Form 26AS now shows only TDS and TCS credits. The Annual Information Statement (AIS) is now the comprehensive record of all your income. If you ignore it, the Income Tax Department will not. Mismatches between AIS and your filed ITR are a leading trigger for automated scrutiny notices under Section 143(1)(a) of the Income Tax Act, 2025. This article walks you through both documents, section by section, so you know exactly what to check before you file.
Table of Contents
- Part I: What Form 26AS and AIS Are, and How They Relate What changed from AY 2023-24 onward, three documents you need, the Form 168 transition for FY27
- Part II: Form 26AS for AY 2026-27: What It Contains and How to Read It TDS credits, TCS, advance tax, self-assessment tax, refunds, how to access it
- Part III: AIS for AY 2026-27: The Complete Section-by-Section Walkthrough All 46 information categories, what each section reports and who reports it
- Part IV: The TIS: Your Summarised Income Reference How TIS derives from AIS, reported vs derived values, what to use when filing
- Part V: How to Reconcile AIS with Your Actual Income Common mismatches, employer errors, bank reporting gaps, mutual fund STCG/LTCG
- Part VI: How to Submit Feedback on Incorrect AIS Entries Step-by-step feedback process, four response options, what happens after you submit
- Pre-Filing Reconciliation Checklist
- Frequently Asked Questions
31 Jul 2026
ITR filing deadline for non-audit cases, AY 2026-27. Three weeks away from today.
46
Information categories reported in AIS covering income, investments, and financial transactions linked to your PAN.
Form 168
New name for Form 26AS under Income Tax Act, 2025. Applicable from FY 2026-27 (AY 2027-28). For AY 2026-27, use current Form 26AS and AIS.
143(1)(a)
Section under ITA 1961 under which automated mismatch notices are issued. Applicable for AY 2026-27. New Act equivalent (Section 270) applies from AY 2027-28 onward.
Part IWhat Form 26AS and AIS Are, and How They Relate
The Three Documents Every Taxpayer Needs for AY 2026-27
Before you open your ITR form, you need three documents from the Income Tax portal. Understanding what each one covers and how they relate to each other is the foundation of accurate filing.
| Document | What It Contains | Where to Access | Primary Use |
|---|---|---|---|
| Form 26AS (Annual Tax Statement) | TDS deducted on your income, TCS collected, advance tax paid, self-assessment tax paid, refunds received. From AY 2023-24 onward, it no longer contains the broader financial transaction data. | Income Tax Portal (incometax.gov.in) under e-File, or TRACES portal (tdscpc.gov.in) | Verify that TDS credits match what deductors have deposited against your PAN |
| AIS (Annual Information Statement) | All financial transactions linked to your PAN: salary, interest, dividends, capital gains, mutual fund transactions, foreign remittances, GST turnover, purchase and sale of property, and more. 46 categories total. | Income Tax Portal under e-File then AIS. Also available via the AIS mobile app. | Primary income reference for ITR filing. Cross-verify all income heads before filling ITR. |
| TIS (Taxpayer Information Summary) | A category-wise summary of the AIS data. Shows “reported value” (raw from sources) and “derived value” (after processing your feedback). One consolidated number per income head. | Available within the AIS section on the portal | Use the derived value from TIS as the reference figure when filling in each income head in your ITR. |
What Changed from AY 2023-24 Onward and Why It Matters
Until AY 2022-23, Form 26AS was a comprehensive document. It showed TDS, advance tax, and also high-value financial transactions reported under the Statement of Financial Transactions (SFT). From AY 2023-24 onward, the Income Tax Department split this. Form 26AS became focused exclusively on TDS and TCS data. Everything else moved to AIS.
This change matters because many taxpayers still rely only on Form 26AS, as they did for years. That is now insufficient and risky. If you bought or sold mutual funds, received dividends, earned interest on savings accounts, received rent, or made any high-value financial transaction in FY 2025-26, none of that appears in Form 26AS. It all appears in AIS. If you do not check AIS and a reporting entity has filed data about your income, the Income Tax Department has that information even if you do not know about it.
The scrutiny risk is real: The Income Tax Department’s Compliance and Investigation Unit uses AIS data to run automated cross-verification against filed ITRs. Under Section 143(1)(a) of the Income Tax Act, 1961 (applicable for AY 2026-27, since the new Income Tax Act 2025 section numbers take effect only from AY 2027-28), a return is processed with an adjustment if the income disclosed in the ITR is less than the income reported in the AIS. This triggers an intimation, not just a notice. You then have 30 days to respond. If you do not respond, the adjustment is treated as accepted. Knowing your AIS before filing eliminates this risk entirely.
The Form 168 Transition: What to Know
Under the Income Tax Act, 2025 and the Draft Income-tax Rules, 2026, Form 26AS is being replaced by Form 168 from Tax Year 2026-27 (FY 2026-27) onward, meaning AY 2027-28. Form 168 functions the same way as the current AIS and is auto-generated from reporting entity data linked to your PAN. However, for the current filing season, AY 2026-27 covering FY 2025-26, you continue to use the existing Form 26AS and AIS. Form 168 will be relevant from FY 2026-27, which is AY 2027-28. Do not let this rename cause confusion for your current filing.
Part IIForm 26AS for AY 2026-27: What It Contains and How to Read It
How to Access Form 26AS
Log in to incometax.gov.in
Use your PAN as user ID and your registered password. If not registered, complete registration first using your PAN, Aadhaar, and mobile number.
Go to e-File, then Income Tax Returns, then View Form 26AS
You will be redirected to the TRACES portal (tdscpc.gov.in) where Form 26AS is hosted. Accept the usage disclaimer.
Select Assessment Year 2026-27
Choose AY 2026-27 to view data for FY 2025-26. You can view it online (HTML) or download it as a PDF. For reconciliation purposes, downloading the PDF gives you a permanent record.
What Each Part of Form 26AS Contains
| Part | Contents | What to Check |
|---|---|---|
| Part A | TDS deducted on income other than salary. Includes TDS on interest, rent, professional fees, commission, contractor payments, etc. | Verify the TAN of each deductor, the amount deducted, and whether it is mapped to your PAN correctly. Each row shows deductor name, TAN, section, amount paid, TDS deducted, and deposit status. |
| Part A1 | TDS on sale of immovable property under Section 194-IA (buyer deducts 1% TDS on property purchase above Rs 50 lakh). | If you sold a property in FY 2025-26, verify the buyer has deducted and deposited TDS correctly. If missing, the liability may fall on you. |
| Part A2 | TDS on rent payments under Section 194-IB (individuals and HUFs paying rent above Rs 50,000 per month deduct 2% TDS from annual rent). | If you receive rent and your tenant deducted TDS, verify the amount matches your rental income. |
| Part B | TDS on salary. Shows employer TAN, salary amount, and TDS deducted under Section 192. | Cross-check against your Form 16 Part A. The TDS figure in Form 26AS Part B must match Form 16 exactly. If there is a difference, contact your employer’s payroll or accounts team immediately. |
| Part C | Tax deposited directly by the taxpayer: advance tax and self-assessment tax. | Verify each advance tax instalment and any self-assessment tax paid. The BSR code, challan number, and date must match your payment records. If an advance tax payment is missing, check the challan separately on the OLTAS portal. |
| Part D | Refunds received during FY 2025-26 against any prior assessment year. | Note refund amounts if you need to reconcile cash inflows. |
| Part E | Annual Information Report high-value transactions as reported pre-AIS (now largely moved to AIS for current years). | Review if any legacy SFT entries appear here for earlier years. |
| Part F | TDS on sale of immovable property paid by buyer (Form 26QB filings where you are the seller). | If you sold property, ensure Form 26QB was correctly filed by the buyer and TDS is reflecting here. |
| Part G | TCS collected at source. Includes TCS on foreign remittances under LRS, purchase of overseas tour packages, sale of goods above threshold. | If you remitted money abroad under LRS in FY 2025-26, TCS at 20% above Rs 7 lakh should appear here. Verify rate and amount. |
The most important reconciliation in Form 26AS: Part B, TDS on salary. Your Form 16 Part A, issued by your employer, must match Form 26AS Part B exactly. If your employer deducted tax but deposited it late or under a wrong TAN, the mismatch will show here and you may face a demand notice even though you never received the salary net of that TDS. If there is any mismatch, resolve it with your employer before filing. You cannot claim a TDS credit that does not appear in Form 26AS.
Part IIIAIS for AY 2026-27: The Complete Section-by-Section Walkthrough
How to Access AIS
Log in to incometax.gov.in
Use your PAN and password as above.
Go to e-File, then AIS
You will land on the AIS dashboard. The page shows a summary overview of all information categories with reported values.
Download the full AIS in PDF or JSON
Click the download icon. PDF is easier to read. JSON is useful if you want to import data programmatically. Download and save it. This is your primary reconciliation reference.
Alternatively, use the AIS mobile app
The Income Tax Department has launched a dedicated AIS mobile app available on Android and iOS. It provides the same information in a mobile-friendly format and allows you to submit feedback on incorrect entries from your phone.
The 46 AIS Information Categories: What Each Reports
AIS organises data under three broad categories: TDS or TCS information, SFT (Statement of Financial Transactions) information, and Other Information. Here is what each major section contains and who reports it to the Income Tax Department.
| AIS Section | What It Reports | Who Reports It | What to Verify |
|---|---|---|---|
| Salary | Gross salary, perquisites, allowances as reported in Form 24Q quarterly TDS returns | Your employer | Must match Form 16 Part B. Verify all components including arrears, bonus, leave encashment. |
| Rent Received | Rent income reported when tenant deducts TDS under Section 194-I or 194-IB | Tenants who deduct TDS | If you receive rent but tenant does not deduct TDS (rent below threshold), this entry may be missing. You must still report the income. |
| Dividends | Dividends paid by listed companies, mutual fund dividends (IDCW payouts) | Companies and mutual fund houses (RTA) | Compare with your demat account dividend statements. Small dividends from minor holdings are often missed by taxpayers. |
| Interest from Savings Account | Interest credited to your savings bank accounts | Banks under SFT-016 | Even small amounts like Rs 2,000 interest from a minor account must be disclosed under the head “Income from Other Sources.” |
| Interest from Deposits (FD, RD, etc.) | Interest earned on fixed deposits, recurring deposits, and other term deposits | Banks and post offices | FD interest is often the biggest reconciliation gap. Banks report the total interest for the year. If your FD is multi-year, compare with bank-issued Form 16A (TDS certificate) and your bank statement. |
| Interest from Others | Interest on bonds, NSC (including accrual), company deposits, P2P lending platforms | Issuers and RBI-registered platforms | NSC interest is accrued but not received annually. Many taxpayers miss this. Verify accrued NSC interest from the post office certificate. |
| Rent on Plant and Machinery | Rent received on equipment or machinery as reported by the payer | Businesses paying equipment rent above threshold | If you lease equipment, verify TDS at 2% under Section 194-I(a) has been deducted and deposited. |
| Winnings from Lottery, Crossword, etc. | Prize winnings from lotteries, card games, horse racing, TV game shows | Organising entities | TDS at 30% flat rate applies. Verify that the amount in AIS matches what you received net of TDS. |
| Receipt of Commission | Commission income reported by payers | Principals paying commission under Section 194H | If you are an agent or distributor, verify all commission receipts are captured. Cross-check with invoices. |
| Receipt of Professional Fees | Professional or technical fees received | Clients deducting TDS under Section 194J | Freelancers and consultants must reconcile with all invoices raised. If a client missed TDS deduction, the income still needs to be disclosed. |
| Sale of Immovable Property | Property sale consideration as reported by the buyer in Form 26QB | Buyer of the property | Verify the amount matches your sale deed. Check if stamp duty value (Section 50C) applies and whether capital gains are correctly computed. |
| Purchase of Immovable Property | Property purchase consideration as reported by the seller or through registration data | Sub-registrar offices and property sellers | Verify accuracy of the purchase amount. This forms the cost of acquisition for future capital gains computation. |
| Sale of Securities and Mutual Fund Units | Sale proceeds from stocks, equity mutual funds, debt mutual funds, bonds | Depositories (CDSL, NSDL) and mutual fund RTAs (CAMS, KFintech) | The most complex section for most taxpayers. Each transaction is separately reported. Reconcile with your broker’s annual capital gains statement and your mutual fund consolidated account statement. |
| Purchase of Securities and Mutual Fund Units | Cost of acquisition of stocks, equity mutual funds, debt mutual funds | Depositories and mutual fund RTAs | Verify cost of acquisition matches broker and RTA statements. Errors here distort capital gains computation. |
| Dividend from Mutual Funds | IDCW (Income Distribution cum Capital Withdrawal) payouts from mutual fund schemes | Mutual fund RTAs | Verify all IDCW payouts are captured, including small amounts from debt fund dividend plans. |
| Foreign Remittance and Travel | Amounts remitted abroad under LRS, amounts received from abroad | Authorised Dealer banks under Form 15CC | Cross-check with bank-issued LRS remittance statements. TCS at 20% on LRS above Rs 7 lakh should reconcile with Form 26AS Part G. |
| Foreign Travel | Purchase of overseas tour packages | Travel agents | TCS at 5% (or 20% if PAN not submitted) applies. Verify TCS collected matches Form 26AS. |
| Business Receipts (GST Turnover) | Your turnover as filed in GST returns | GST Network reporting to Income Tax Department | If you have a GST registration, the turnover reported in GSTR-1 or GSTR-3B will appear here. Your ITR income from business must be consistent with GSTR-filed turnover. Mismatches between GST and ITR are a major scrutiny trigger. |
| Cash Deposits in Bank Accounts | Cash deposits above specified thresholds in savings or current accounts | Banks under SFT-005 | Cash deposits above Rs 10 lakh in savings accounts in a year are reported. Each such deposit must have a corresponding income source disclosed in your ITR. |
| Cash Withdrawals | Cash withdrawals above Rs 1 crore from current account in a year | Banks under SFT-006 | High cash withdrawals may be scrutinised for business income disclosure consistency. |
| Credit Card Transactions | Total credit card payments above Rs 1 lakh (cash payment) or Rs 10 lakh (any mode) in a year | Banks under SFT-003 and SFT-004 | Large credit card spends create an implied income test. If spending significantly exceeds disclosed income, explain the source. |
| Purchase of Mutual Funds | Gross purchases in mutual fund schemes above Rs 2 lakh per year per folio | Mutual fund RTAs under SFT-010 | Verify investment amounts match your CAS statements from CAMS or KFintech. |
| Purchase of Bonds or Debentures | Investment in bonds or debentures above Rs 10 lakh in a financial year | Issuing companies under SFT-012 | Matches with your demat holding statement and broker transaction history. |
| Purchase of Shares via IPO or Rights Issue | Investment in IPO subscriptions and rights issue above Rs 10 lakh | Companies and registrars under SFT-007 | Verify against your bank account debit for IPO application and allotment. |
| Purchase of Foreign Currency | Foreign currency purchases above specified thresholds | Authorised Dealer banks | Cross-check with bank forex purchase receipts. |
The GST-ITR mismatch is the fastest-growing scrutiny trigger: The Income Tax Department now receives turnover data directly from the GST Network for every GSTIN linked to a PAN. If your GSTR-1 shows gross supplies of Rs 40 lakh but your ITR discloses business income from Rs 28 lakh of net profit after expenses, make sure your ITR’s gross turnover figure under Schedule BP (business income) matches the GST-reported figure. It does not need to match exactly due to exempted supplies, composition difference, and other adjustments, but the reconciliation must be documented and the difference must be explainable. If you cannot explain it, a notice will follow.
Part IVThe TIS: Your Summarised Income Reference
The Taxpayer Information Summary (TIS) is a derived, consolidated view of the AIS data. It is not a separate form. It lives within the AIS section on the portal. Understanding it correctly is important because it has two columns that mean different things.
| TIS Column | What It Means | Which to Use for ITR |
|---|---|---|
| Reported Value | Raw data exactly as submitted by reporting entities (banks, employers, depositories, etc.) before any processing or feedback from you | Do not use this directly for ITR. It may contain duplicates, errors, or pending corrections. |
| Derived Value | Processed value after the department applies deduplication logic and after incorporating your submitted feedback on incorrect entries | Use this figure as your reference when filling income heads in your ITR. This is what the department will compare against your filed return. |
The TIS updates automatically when you submit feedback on incorrect entries in the AIS. Importantly, you cannot edit TIS directly. All corrections flow from the AIS feedback mechanism. Once the department processes your feedback, the derived value in TIS will reflect the corrected figure.
Important timing note: After submitting feedback on an incorrect AIS entry, allow at least 24 to 48 hours before checking whether the TIS derived value has updated. Do not file your ITR immediately after submitting feedback. Confirm the TIS derived value reflects your correction before proceeding with filing.
Part VHow to Reconcile AIS with Your Actual Income
The Five Most Common AIS Mismatches and How to Handle Each
These are the mismatches that most commonly cause filing errors or post-filing notices. Knowing them in advance saves significant time and stress.
1. FD Interest Mismatch
Banks report interest on FDs on an accrual basis in AIS, but the amount may differ from what you see in your bank statement if the FD matures in a different year. For example, if you have a two-year FD from FY2024 to FY2026, the bank may report the full two years of accrued interest in AIS for FY2025-26 in one entry. Compare the AIS figure against your bank’s interest certificate, not just your bank statement. The bank’s Form 16A for TDS deducted is the most reliable cross-check document here.
2. Salary Mismatch
AIS salary data comes from Form 24Q filed by your employer. If your employer filed the quarterly TDS returns with a data entry error (wrong salary amount, wrong PAN, or delayed Q4 filing), your AIS salary will not match your Form 16. The solution is to use Form 16 as the definitive document, report income correctly, and raise the discrepancy with your employer for correction through a revised TDS return. Do not adjust your ITR income downward to match a wrong AIS figure.
3. Capital Gains Mismatch from Mutual Funds
AIS shows each mutual fund redemption transaction separately, reported by the RTA. The figures may include both equity and debt transactions. The STCG and LTCG amounts in AIS may differ from your RTA-generated capital gains statement because AIS uses the reported sale proceeds while the capital gains statement uses the net gain after cost of acquisition. Do not report the AIS sale proceeds figure as your capital gain. Your capital gain is sale proceeds minus indexed cost of acquisition. Use the capital gains statement from CAMS or KFintech as the primary reference.
4. Double Reporting of Dividend Income
If you hold the same stock in both a demat account and a physical form (some older holdings), or if a company reported dividends twice due to a corporate action, AIS may show the dividend twice. Submit feedback marking the duplicate entry as “Income not pertaining to this PAN” or “Duplicate information.” Do not report doubled dividend income in your ITR just because AIS shows it twice.
5. GST Turnover vs ITR Turnover
Already covered in Part III. The practical action here is to prepare a reconciliation statement explaining the difference between GSTR-reported gross supplies and ITR-disclosed gross receipts before filing. Keep this statement in your records. If a notice arrives, this document is your first line of defence.
Real World Example: SIP Redemption Reporting
Priya has been doing a monthly SIP of Rs 5,000 in an equity fund for four years. In FY 2025-26, she redeemed units worth Rs 3.2 lakh in total. The purchase cost of those units was Rs 2.4 lakh. Her long-term capital gain is Rs 80,000. Under Section 112A of the Income Tax Act, 1961, LTCG on equity mutual funds is taxable at 12.5% on gains exceeding Rs 1.25 lakh in a financial year. Since her total LTCG is Rs 80,000, which is below the Rs 1.25 lakh exemption threshold, the gain is fully exempt.
Her AIS shows the redemption proceeds of Rs 3.2 lakh under “Sale of Mutual Fund Units.” It does not show her cost of acquisition. Her TIS derived value shows Rs 3.2 lakh as reported value. If she uses this figure as her capital gain, she pays tax on Rs 3.2 lakh instead of Rs 80,000. The correct approach is to use her CAMS statement, which shows actual purchase NAV, purchase date, and computed LTCG of Rs 80,000, and report that figure in Schedule CG of her ITR. The AIS sale proceeds figure and the capital gain figure are two completely different numbers.
Part VIHow to Submit Feedback on Incorrect AIS Entries
The AIS system allows you to flag entries that you believe are incorrect, duplicated, or do not belong to you. Submitting feedback does not immediately change the AIS data. The department reviews it and updates the TIS derived value after processing. Here is the step-by-step process.
Go to AIS on the portal and locate the specific entry
Navigate to e-File, then AIS. Find the information category containing the incorrect entry (for example, “Interest from Deposits”). Click on it to expand the individual transactions.
Click the feedback icon on the specific transaction
Each transaction row has a small feedback icon or button. Click it to open the feedback window for that specific entry.
Select the appropriate feedback response
The system offers four feedback options: (a) Information is correct, (b) Information is not fully correct, (c) Information relates to other PAN or year, (d) Information is duplicate or included in another information. Select the most accurate option for your situation.
Enter the correct amount if partially wrong
If you select “Information is not fully correct,” a field appears for you to enter the correct amount. For example, if the AIS shows Rs 48,000 FD interest but the correct amount is Rs 32,000, enter Rs 32,000 and submit.
Submit the feedback and note the acknowledgement
After submission, the system generates an acknowledgement. Save or screenshot this. The TIS derived value will update once the department processes your feedback, typically within 24 to 48 hours.
Verify the TIS derived value has updated before filing
Return to AIS after 48 hours and check whether the TIS derived value in the relevant category reflects your correction. Once it does, use that derived value when filling the corresponding income head in your ITR.
What happens if the reporting entity disputes your feedback: In cases where your feedback conflicts with what the reporting entity (bank, employer, depository) has reported, the Income Tax Department may revert to the original reported value. If you are confident your figure is correct, ensure you have documentary evidence (bank certificate, Form 16, broker statement) to support it. When you file your ITR with a different figure from AIS, include a note in the schedule and retain the supporting documents. The department may send a query asking you to explain the difference, which you can then respond to with your evidence.
Pre-Filing Reconciliation Checklist
Complete this checklist at least three weeks before the July 31, 2026 filing deadline. This gives you time to resolve any mismatch before the last-minute rush.
- Download Form 26AS for AY 2026-27 from TRACES and verify every TDS entry against Form 16, Form 16A certificates received from each deductor.
- Download AIS for AY 2026-27 from the Income Tax Portal. Read every section, not just the ones you expect to have entries in. Surprises are common.
- Verify salary in AIS against Form 16 Part B. Any difference means your employer’s TDS return has an error. Resolve before filing.
- Reconcile FD interest in AIS against bank-issued Form 16A and bank interest certificates. Accrual versus receipt differences are the most common mismatch here.
- Reconcile mutual fund capital gains using CAMS or KFintech annual capital gains statement, not the AIS sale proceeds figure alone.
- Verify all dividend entries in AIS against your demat account dividend history. Small dividends from minor holdings are frequently missed.
- Check if your GST turnover in AIS matches your GSTR-filed gross supplies. Prepare a reconciliation note if they differ.
- Verify LRS and foreign remittance entries against bank-issued remittance statements. TCS at 20% above Rs 7 lakh should reconcile with Form 26AS Part G.
- Submit AIS feedback on any incorrect entries and wait for TIS derived values to update before filing.
- Use TIS derived values (not reported values) as your reference when filling each income head in your ITR form.
Frequently Asked Questions
Always report your actual correct income in your ITR, not the wrong AIS figure. The Income Tax Department’s FAQ on AIS clarifies that AIS is a reference document. Your obligation is to report your actual income accurately. If AIS shows an incorrect figure, submit feedback through the portal to correct it, and then file your ITR with the correct income. In your ITR, report the accurate income. If there is still a residual mismatch after filing, the department may send a query under Section 143(1)(a). At that stage, respond with your documentary evidence showing the correct figure. Never deliberately misstate your income simply to match an incorrect AIS entry.
The AIS reported value is the raw data exactly as submitted by reporting entities such as banks, employers, depositories, and mutual fund RTAs. It may contain duplicates, errors, or transactions belonging to different years. The TIS derived value is the figure after the Income Tax Department applies deduplication logic and incorporates feedback you have submitted on incorrect entries. The CBDT FAQ on AIS confirms that the TIS derived value is the processed, final figure that should be used as reference when filling income heads in your ITR. Always use the derived value, not the reported value, for this purpose. Source: Income Tax Department FAQs on AIS (incometax.gov.in/iec/foportal/ais-faq).
Both are relevant for AY 2026-27, but they serve different purposes. From AY 2023-24 onward, Form 26AS shows only TDS and TCS data. It no longer contains high-value financial transaction data. AIS is the comprehensive statement for all other income information. For AY 2026-27, you need Form 26AS to verify TDS credits and advance tax payments, and AIS to verify all income, capital gains, dividends, interest, and other financial transactions. Under the Income Tax Act, 2025, Form 26AS is being replaced by Form 168 with effect from FY 2026-27. However, for the current filing season (AY 2026-27, covering FY 2025-26), the existing Form 26AS and AIS continue to apply. Source: CBDT notification on AIS; Income Tax Department FAQ page; Taxscan report on Form 168 transition dated March 31, 2026.
The Income Tax Department’s processing system under Section 143(1) of the Income Tax Act, 2025 automatically cross-verifies your filed ITR against AIS data. If income disclosed in your ITR is lower than income reported in AIS, the system generates an intimation under Section 143(1)(a) proposing an addition to your income. You then have 30 days to respond to this intimation. If you do not respond, the adjustment is treated as accepted and a demand is raised for additional tax, interest, and potentially penalty. Avoiding this situation entirely is simple: check AIS before filing, reconcile any differences, submit feedback on incorrect entries, and file using the correct figures. The cost of ignoring AIS is a potential tax demand plus interest under Section 234A, 234B, or 234C of the Income Tax Act, 1961 depending on when the demand arises. Note: These sections are renumbered as Sections 423, 424, and 425 under the Income Tax Act, 2025, applicable from Tax Year 2026-27 onward.
No. AIS shows the sale proceeds (redemption amount) from your mutual fund units, not your taxable capital gain. Your capital gain is the redemption amount minus the cost of acquisition of the units redeemed. For equity mutual funds and equity-oriented hybrid funds held for more than 12 months, the gain is Long-Term Capital Gain taxable at 12.5% under Section 112A of the Income Tax Act, 1961 (applicable for AY 2026-27), with the first Rs 1.25 lakh per year exempt. For units held less than 12 months, the gain is Short-Term Capital Gain taxable at 20%. For debt mutual funds, all gains (regardless of holding period) are taxable at your income tax slab rate following the removal of indexation benefit under the Finance Act, 2023. Use your annual capital gains statement from CAMS (cams.com) or KFintech (kfintech.com) to get the correct taxable gain figure, and report that amount in Schedule CG of your ITR, not the AIS redemption proceeds figure.
Your Tax Return Is Only as Accurate as What You Check Before Filing
Form 26AS and AIS exist so that the Income Tax Department can verify your return against a comprehensive record of your financial activity. That record is more complete than most taxpayers realise. Every bank FD, every SIP redemption, every dividend, every property sale, every LRS remittance, and every rupee of GST turnover feeds into a system that will automatically flag discrepancies with what you report.
The good news is that this system is also transparent. You can see exactly what the department sees about you, before you file. That is a significant advantage if you use it. The three weeks between today and the July 31 deadline are enough time to download both documents, work through each section, submit feedback on any errors, and file a clean return that will not invite a notice.
Treat Form 26AS and AIS not as compliance boxes to tick after filing, but as the starting documents that your ITR should be built from. That one change in approach eliminates most of the post-filing problems that taxpayers encounter every year.
Disclaimer: This article is for informational and educational purposes only and is current as of June 10, 2026 for AY 2026-27 (FY 2025-26). All procedural information is sourced from the Income Tax Department’s official FAQ on AIS (incometax.gov.in/iec/foportal/ais-faq) and CBDT circulars and notifications. Section references throughout this article use Income Tax Act, 1961 numbering, which remains applicable for AY 2026-27 (FY 2025-26). The Income Tax Act, 2025 with new section numbers applies from Tax Year 2026-27 (AY 2027-28) onward. Tax laws and procedures are subject to change. Consult a qualified Chartered Accountant or tax adviser for advice specific to your situation. Last updated: June 10, 2026.
