The Income Tax Department now tracks virtually every financial transaction linked to your PAN through the Annual Information Statement (AIS). From bank interest and mutual fund redemptions to property sales and credit card payments, AIS captures it all - and the Department uses this data to cross-verify your ITR. If there is a mismatch between what AIS shows and what you declare, automated processing under Section 143(1) will flag it.
But what if the AIS itself contains errors? Duplicate entries, incorrect amounts, transactions that belong to someone else, or stale data from a corrected TDS return - these are common. This guide explains exactly how to identify, flag, and correct AIS errors before filing your ITR for FY 2025-26.
What Is an AIS Mismatch and Why Does It Matter?
An AIS mismatch occurs when the income or transaction data shown in your Annual Information Statement does not match your actual financial position. This can happen because of errors by the reporting entity (bank, employer, broker, registrar), duplicate reporting from multiple sources, or transactions that do not belong to you (wrong PAN).
The mismatch matters because the Department treats AIS data as the primary reference. If your ITR does not declare income shown in AIS, the automated 143(1) processing will add the undeclared amount to your tax liability - resulting in an additional demand plus interest at 1% per month.
For individuals managing income tax return filing, correcting AIS errors before filing is far cheaper and simpler than responding to a 143(1) notice after filing.
Key Terms You Should Know
- AIS (Annual Information Statement): Comprehensive financial statement capturing all transactions reported against your PAN - salary, interest, dividends, securities, property, foreign remittances, SFT data. Primary document for Department cross-verification.
- TIS (Taxpayer Information Summary): Simplified summary derived from AIS. Shows processed value (cleaned data) and derived value (after feedback). Used for ITR pre-fill. Auto-updates when AIS feedback is accepted.
- AIS Feedback: Online mechanism on incometax.gov.in to dispute, correct, or confirm AIS entries. Six feedback types available. Source entity gets 30 days to respond.
- Reporting Entity / Source: The third party that reported the transaction to the Department - bank, employer, mutual fund house, depository, property registrar. They file SFT, TDS returns, or other reports.
- SFT (Statement of Financial Transactions): High-value transaction reports filed by banks, mutual funds, registrars for transactions like cash deposits above Rs 10 lakh, property above Rs 30 lakh, credit card above Rs 10 lakh.
- Section 143(1) Intimation: Automated processing notice issued when ITR data does not match AIS. Can result in additional tax demand, reduced refund, or return treated as defective.
- Nudge Campaign: The Department's data-driven alert system sending emails and portal notifications to taxpayers whose AIS data does not match ITR. Not a formal notice - but ignoring it can lead to formal action.
Who Needs to Check AIS for Errors?
- Every taxpayer filing for FY 2025-26 - AIS errors can exist in any category of income
- Salaried employees - verify salary TDS matches Form 16; check for duplicate interest entries from multiple bank accounts
- Investors - verify equity and mutual fund transactions. Depositories and AMCs both report, creating potential duplicates
- Property buyers and sellers - verify stamp duty, sale consideration, and TDS amounts. Sub-registrar data may differ from actual transaction
- Landlords - verify rental income reported by tenants under TDS Section 194-IB. Tenant may report incorrect amounts
- Individuals with NRO accounts - banks report interest at source rate; verify actual interest credited
- Taxpayers who received nudge emails - the Department has specifically flagged your AIS for review
Employees filing ITR filing for salary should check AIS at least 2-3 weeks before the July 31 deadline to allow time for feedback submission and source response.
Common AIS Errors and Mismatches
| Error Type | Example | Why It Happens | Impact If Not Corrected |
|---|---|---|---|
| Duplicate entry | Same Rs 25,000 FD interest shown twice - by bank branch and bank HQ | Multiple reporting entities file SFT for same transaction | Income overstated → higher tax demand |
| Incorrect amount | AIS shows Rs 1,50,000 salary TDS but Form 16 shows Rs 1,20,000 | Employer filed correction return but AIS not yet updated | TDS credit mismatch → reduced refund |
| Wrong PAN | Property transaction of Rs 40 lakh appears in your AIS but you did not buy any property | Sub-registrar recorded wrong buyer PAN | Unexplained income addition → penalty risk |
| Stale data | Interest from a closed FD still appearing in AIS | Bank filed annual SFT before account closure was processed | Overreporting of interest income |
| Missing transaction | Your salary TDS does not appear in AIS | Employer has not filed quarterly TDS return | Cannot claim TDS credit → higher tax payable |
| Gross vs net confusion | AIS shows Rs 5,00,000 mutual fund redemption as "income" | AMC reported gross redemption, not capital gain | Full redemption treated as income instead of partial gain |
How to Correct AIS Errors: Step-by-Step
- Log In to the E-Filing Portal. Navigate to incometax.gov.in → Services → AIS. Select FY 2025-26. Your complete AIS will display with Part A (personal details) and Part B (financial transactions).
- Review Each Transaction Category. Go through each section: TDS/TCS, SFT (interest, dividends, securities, property), payments of taxes, demands, refunds, and other information. Cross-check each entry against your documents - Form 16, bank statements, depository records, property deeds.
- Identify Errors and Click "Add Feedback". For each incorrect transaction, click the "Optional" or "Add Feedback" button in the feedback column. The portal shows the reported value (from source) and lets you provide the correct value. For capital gains mismatches, refer to ITR for capital gains for correct computation methodology.
- Select the Appropriate Feedback Type. Six feedback types are available (see table below). Select the one that accurately describes the error. Provide supporting details as prompted by the portal.
- Submit and Track Status. After submission, the feedback is sent to the reporting entity (source). The source gets 30 days to respond. Track status in the AIS feedback column: "Feedback shared with source," "Source response received," "Accepted," "Partially accepted," or "Rejected."
- Wait for TIS Update. If feedback is accepted, the TIS (Taxpayer Information Summary) updates automatically with the corrected "derived value." This derived value feeds into the ITR pre-fill. If rejected, TIS retains the original value.
- File ITR After Correction (or With Documentation). If correction is confirmed in TIS, file with the updated pre-filled data. If correction is pending or rejected, file with your correct figures supported by documents. Retain proof of feedback submission. Professional tax planning services can prepare your ITR with documented justification for any AIS deviations.
AIS Feedback Types: Complete Reference
| Feedback Type | When to Use | What Happens |
|---|---|---|
| Information is correct | Transaction and amount are accurate - no changes needed | AIS entry confirmed. No change to TIS. |
| Information is not fully correct | Amount or date is partially wrong - you know the correct value | You provide the correct amount. Source entity notified. If accepted, TIS updates with corrected value. |
| Information is not correct | The entire transaction is incorrect - wrong amount, wrong category, wrong details | You provide correct details. Source must verify and respond within 30 days. |
| Information is duplicate | Same transaction reported twice - by different arms of the same entity or two entities | You flag the duplicate entry. Department verifies and removes the duplicate from TIS. |
| Information relates to other PAN / other person | Transaction does not belong to you - wrong PAN linked by the reporting entity | You deny the transaction. Source entity must verify the PAN. If confirmed as error, entry removed from your AIS. |
| Information is denied | You have no knowledge of this transaction - it does not relate to your financial activity at all | Strong denial. Source entity must provide evidence. If they cannot substantiate, entry is removed. |
Note: Selecting "Information is correct" is also valuable - it helps the Department confirm your data and speeds up ITR processing. For entries you agree with, actively confirming them reduces the chance of automated queries.
Documents Needed for AIS Error Correction
- Bank statements - for all savings, FD, and RD accounts showing actual interest credited
- Form 16 / Form 16A - for verifying salary TDS and non-salary TDS amounts
- Depository transaction statements (CDSL/NSDL) - for verifying equity and mutual fund transactions
- Property registration documents - sale deed, stamp duty receipt, TDS certificate (Form 16B)
- Broker contract notes - for capital gains computation vs AIS reported redemption amounts
- Mutual fund CAS (Consolidated Account Statement) - for SIP, redemption, and switch verification
- Credit card statements - for verifying high-value payment amounts reported in SFT
- Foreign remittance certificates - for LRS transactions reported by banks
- Screenshots of AIS feedback submission - retain as proof of correction attempt
- Correspondence with reporting entities - emails/letters requesting correction at source
What to Do When AIS Feedback Is Rejected
If the reporting entity rejects your feedback or does not respond within 30 days, the AIS entry remains unchanged. This does not mean you must accept the incorrect amount in your ITR.
Filing strategy when feedback is rejected:
- File your ITR with the correct income figure based on your documents - not the incorrect AIS amount
- Retain all supporting documents (bank statements, certificates, contract notes) as evidence
- Keep a screenshot or record of the AIS feedback submission and rejection status
- If Section 143(1) intimation is issued based on AIS data, respond with your documents explaining the AIS error
- Contact the reporting entity directly (bank branch, employer HR, broker) and request them to file a correction return (revised TDS/SFT)
- If the entity files a correction, the AIS will update in the next processing cycle - you can then file a revised return with matched data
Accurate TDS return filing by deductors is the root cause solution. If the error originates from a wrong TDS return, the deductor must file a correction return on TRACES for the AIS to update.
AIS Mismatch: Consequences of Ignoring Errors
| Consequence | Section | Details |
|---|---|---|
| Automated demand under intimation | Section 143(1) | Department adds undeclared AIS income to your tax computation. Results in additional tax demand + interest at 1% per month. |
| Defective return notice | Section 139(9) | If AIS shows income not reflected in ITR, return may be flagged as defective. 15 days to rectify or return is treated as invalid. |
| Penalty for misreporting | Section 270A | If non-disclosure is determined as misreporting or concealment: penalty up to 200% of tax on concealed income. |
| Delayed refund | Administrative | Refund processing delayed until mismatch is resolved. Department may adjust refund against the AIS-based demand. |
| Scrutiny selection | Department guidelines | Repeated AIS mismatches increase probability of case selection for scrutiny assessment under Section 143(2). |
| Prosecution (extreme cases) | Section 276C | Willful tax evasion based on AIS data can attract prosecution: 6 months to 7 years imprisonment. |
Common Mistakes When Dealing With AIS Errors
Mistake 1: Blindly accepting pre-filled ITR data without checking AIS. The e-filing portal pre-fills your ITR from TIS (derived from AIS). If AIS contains errors - duplicates, wrong amounts, stale data - the pre-filled ITR will also be wrong. Always verify pre-filled figures against your source documents before submitting.
Mistake 2: Waiting until filing day to check AIS. AIS feedback requires 30 days for source response. If you discover errors on 30 July and your deadline is 31 July, there is no time for correction. Check AIS in June - immediately after Form 16 is received - to allow adequate correction time.
Mistake 3: Filing with AIS amount when you know it is wrong. Some taxpayers overreport income to "match" AIS figures and avoid notices. This results in paying more tax than legally required. Always file with your correct income - supported by documents - not the AIS amount.
Mistake 4: Not following up when feedback status shows "shared with source." After 30 days, if the source has not responded, the feedback may remain pending indefinitely. Contact the source directly (bank, employer) and request them to accept the feedback or file a correction return. Passive waiting can leave the error unresolved.
Mistake 5: Ignoring nudge campaign emails. The Department's nudge emails are pre-notices - a warning that your AIS data does not match your ITR or filing status. Responding to nudge emails by correcting errors or filing/revising your ITR is far simpler than responding to a formal Section 143(1) or 143(2) notice later.
How AIS Error Correction Connects With ITR Filing Timeline
| Timeline | Action | Notes |
|---|---|---|
| April-May 2026 | Download AIS for FY 2025-26 | Early review - maximum time for corrections |
| June 2026 | Receive Form 16, cross-check with AIS | Identify mismatches immediately |
| June 2026 | Submit AIS feedback for errors | 30-day response window starts |
| July 2026 | Check feedback status, follow up with sources | Contact reporting entities if no response |
| Before 31 July / 31 August 2026 | File ITR with correct figures | Use corrected TIS data or file with documents if correction pending |
| After filing | Monitor for Section 143(1) intimation | Respond with documents if AIS-based demand is issued |
| 31 March 2027 | Revised return deadline | If AIS correction comes through after filing, revise ITR with matched data |
Key Takeaways
AIS errors - duplicates, wrong amounts, wrong PAN, stale data - are common and can trigger automated tax demands under Section 143(1) if not corrected before filing ITR. Check AIS at least 2-3 weeks before your filing deadline.
The AIS feedback mechanism offers six feedback types: correct, not fully correct, not correct, duplicate, relates to other person, and denied. Submit feedback for every incorrect entry. The source entity gets 30 days to respond.
If feedback is accepted, TIS auto-updates with the corrected value. If feedback is rejected or pending, file ITR with your correct figures supported by documents. Retain proof of feedback submission for any future verification.
The Department's nudge campaign actively flags AIS-ITR mismatches. Responding to nudge emails by correcting errors is simpler than responding to formal notices later. In 2025, over 90,000 taxpayers were flagged for false deductions alone.
Filing with incorrect AIS figures to "avoid mismatch" results in overpaying tax. Filing with correct figures supported by documents is always the right approach - even if AIS has not yet been corrected.
Need Help with Income Tax Return Filing?
AIS error correction requires systematic verification across multiple income heads, timely feedback submission, and documented filing strategy. Professional assistance ensures all AIS entries are cross-checked, errors are flagged with correct feedback types, and your ITR is filed with accurate figures - whether AIS has been corrected or not.
Explore our income tax return filing services for end-to-end AIS reconciliation and ITR filing support.
For queries, reach out at +91 945 945 6700 or WhatsApp us directly.
